mooly Posted November 19, 2008 Share Posted November 19, 2008 Hey Guys, A company I'm currently getting most of my freelance work from is telling me that I need to be VAT registered. Now this isn't a problem for me, as the flat rate scheme would mean that I can take home another 4-5% of pay. (Charging VAT @ 17.5% and paying it to HMRC @ 12-13%) But is this going to be a problem for other company's? As in is it in your opinion make me less un-employable? Thanks! Jack Link to comment Share on other sites More sharing options...
Ben Posted November 19, 2008 Share Posted November 19, 2008 Jack Any company that is VAT registered will not mind as it costs them nothing in the long run however you have to look at how many of your customers are VAT registered and if most are not then they will probably not be happy about it. Also worth talkign to an accountant about the flat rate scheme it is good but involves taking the sale price of your service including the VAT and then calculation the VAT repayable as a percentage of that figure, it also means you cannot claim back any VAT on purchases, (not an issue if you dont buy a lot). You also have to come in to a set of categories set out by HMRC, its a bit hard to find the correct one and not everyone can fit into them as you have to be able to justify to an inspector (in theory) why you fall into that category, e.g for engineers it considers architects and surveyors but you may be able to argue that you work in a engineering role doing repairs etc depending on exactly what you do. Ben Link to comment Share on other sites More sharing options...
mar Posted November 19, 2008 Share Posted November 19, 2008 There was a discussion on this just recently linky Link to comment Share on other sites More sharing options...
mooly Posted November 19, 2008 Author Share Posted November 19, 2008 yes it was discussed before, but that was more relating to sales stuff. I dont do a lot of buying of stuff so this is not an issue, and all of my clients are VAT registered so I dont think it would be an issue, just wanted to check first! Thanks! Jack PS and yes the flat rate category's are a bit vague, so if anyone has any suggestions as to which one we do fall into that would be great! Link to comment Share on other sites More sharing options...
Dave Hallett Posted November 19, 2008 Share Posted November 19, 2008 A company I'm currently getting most of my freelance work from is telling me that I need to be VAT registered. Now this isn't a problem for me, as the flat rate scheme would mean that I can take home another 4-5% of pay. (Charging VAT @ 17.5% and paying it to HMRC @ 12-13%) But is this going to be a problem for other company's? As in is it in your opinion make me less un-employable?It seems a little odd that the people contracting you care one way or the other. If they know that due to their work you are at or near the current VAT threshold (67000 over a ROLLING 12 month period) then that would cause them to have an interest but otherwise I can't imagine why they're interested.Note that the flat rate percentage is levied on the gross figure (so if your percentage were 10%, and you charge £100 plus VAT then you pay 10% of £117.50 (£11.75), and not £10.00).If you do much / any work for outfits that are not VAT registered, OR are flat rate registered themselves then it makes you effectively more expensive so it might be worth checking that out. Otherwise - read that other discussion... Cheers Dave Link to comment Share on other sites More sharing options...
paulears Posted November 19, 2008 Share Posted November 19, 2008 Many businesses who use freelancers have the threat of being back taxed and NI'd if their freelancers turn out not to be. VAT registration is not required to trade, but does suggest you 'are real' - it proves to them that HMRC know about you, and you're not just pretending to be freelance. I do work for one form who automatically take tax from everyone, but if you have a VAT number, they make you a supplier and you can just invoice them with your account number. I'd guess this may be why people are checking with you. I'd have thought that ALL freelancers would have fuel, hotels, tools, consumable items etc that can soon add up. This is one where your accountant is really the only person who can advise you on your own personal situation. Link to comment Share on other sites More sharing options...
lightsource Posted November 20, 2008 Share Posted November 20, 2008 Agree with Paul here, talk to you're accountant. If most of you're customers are VAT reg'd, then it won't be an issue with you adding the VAT onto you're services, however you may loose the custom of those who aren't, either they have to pay the extra 17.5% or you have to loose it, There is the advantage that you may be able to claim the VAT back on some of you're expenses, so you're operating costs may reduce, but you have to weigh that up with what you'll be charging you're customers. You're accountant will hopefully be able to analyse these figures, and work out the best option for you're buisiness. Make you're decision on real calculated numbers, not advice from an internet forum, where everyone's circumstances are different. VAT registration is not black and white...... Link to comment Share on other sites More sharing options...
indyld Posted December 1, 2008 Share Posted December 1, 2008 Just dragged up this topic to see if anyone is having more luck than me finding the VAT rates for the Flat Rate scheme. Reading the HMRC guidance, it would suggest that it hasn't necessarily received a straight 2.5% cut - that would make the whole thing less attractive for this short period. Have been trying to find a page of rates that look "new" but am sure the ones I am looking at are the old ones.I am sure the someone here at the BR is much more at one with the Revenue gobbledy gook than I am. Anyone managed to find a table of actual rates, rather than the usual government style blather?vat link Link to comment Share on other sites More sharing options...
Ben Posted December 1, 2008 Share Posted December 1, 2008 Rob, we could all give you rates but they would mean very little, why not give the helpline a call, they are very helpful adn will be able to help you on this. If you have a query, contact HMRC's National Advice Service on 0845 010 9000. Lines are open 8.00 am to 8.00 pm Monday to Friday. Ben Link to comment Share on other sites More sharing options...
paulears Posted December 2, 2008 Share Posted December 2, 2008 Moderation: QUALITY CONTROL - 6 posts that didn't progress this topic have been removed. I have not pm'd each person as I'm pretty sure they will realise why the posts have gone, but for completeness, the BR takes a dim view of tit for tat posting - it's boring and not what the vast proportion of our members wish to see. If you can help answer questions - fine, but please don't go off on semi-rants directed at each other. Link to comment Share on other sites More sharing options...
Dave Hallett Posted December 4, 2008 Share Posted December 4, 2008 Anyone managed to find a table of actual rates, rather than the usual government style blather?vat linkCame to this late - but the new table of flat rates is on page 43 of that document. Is that not what you meant - or was it already answered in one of the deleted posts? Cheers Dave Link to comment Share on other sites More sharing options...
indyld Posted December 5, 2008 Share Posted December 5, 2008 Anyone managed to find a table of actual rates, rather than the usual government style blather?vat linkCame to this late - but the new table of flat rates is on page 43 of that document. Is that not what you meant - or was it already answered in one of the deleted posts? Thanks for your help, Dave. Yes indeed - I found the doc and linked to it in a post that is no longer there. Best wishes. Link to comment Share on other sites More sharing options...
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