Re: VAT

Posted by Myles on Tue Jun 1 13:59:22 1999

In Reply to: VAT posted by TimP on June 01, 1999 at 13:00:18:

>TimJ just sprung something on me, with a potential solution.

>He became VAT registered some time ago, and assures me that I will need to in the near future.

>Up until now the Paneris internal rate has been 32gbp,
>ie 80% of 40gbp.

>TimJ now informs me that for him the price has VAT on top.

Eh? If you get a contract and work out that the hourly rate
is £40 () then you take 10% management fee and 10%
finder's fee, leaving a £32 for developers. If that developer
is VAT registered then they will get £27.23 for themselves
and £4.77 for the taxman. Why isn't this right? How can a
developer charge more than the hourly rate for each hour?

OK, I've just twigged. When TimP is VAT registered then rather
than keeping the whole amount of VAT for the project in his
special bank account, he can pass on the VAT associated
with TimJ's payments to him to pay, in which case TimJ gets
17.5% more than me. But what happens when TimP isn't registerd, like now. Does the scenario above still apply?

>To get around this, and not give the VATman the difference,
>he suggests a barter register for trading between VAT registered and non-VAT registered members.

Seems OK so long as we work out when these accounts will be
settled. I am not VAT registered and have not, so far, used
anyone else on my (small) projects, so I'm not sure how much
I would use it. This is another way of saying that I would
need to be paid for project work, rather than have it chalked up on the slate :-) But obviously, things can change!

>This seems like a useful addition to the PMS.

>What do you think?

Sounds cool.

>yours
>TimP

Myles

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• Re: Re: VAT TimJ Tue Jun 1 14:59:29 1999 (0)



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Subject:

>>TimJ just sprung something on me, with a potential solution. >>He became VAT registered some time ago, and assures me that I will need to in the near future. >>Up until now the Paneris internal rate has been 32gbp, >>ie 80% of 40gbp. >>TimJ now informs me that for him the price has VAT on top. >Eh? If you get a contract and work out that the hourly rate >is £40 (<swoon>) then you take 10% management fee and 10% >finder's fee, leaving a £32 for developers. If that developer >is VAT registered then they will get £27.23 for themselves >and £4.77 for the taxman. Why isn't this right? How can a >developer charge more than the hourly rate for each hour? >OK, I've just twigged. When TimP is VAT registered then rather >than keeping the whole amount of VAT for the project in his >special bank account, he can pass on the VAT associated >with TimJ's payments to him to pay, in which case TimJ gets >17.5% more than me. But what happens when TimP isn't registerd, like now. Does the scenario above still apply? >>To get around this, and not give the VATman the difference, >>he suggests a barter register for trading between VAT registered and non-VAT registered members. >Seems OK so long as we work out when these accounts will be >settled. I am not VAT registered and have not, so far, used >anyone else on my (small) projects, so I'm not sure how much >I would use it. This is another way of saying that I would >need to be paid for project work, rather than have it chalked up on the slate :-) But obviously, things can change! >>This seems like a useful addition to the PMS. >>What do you think? >Sounds cool. >>yours >>TimP >Myles

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