Contracting, VAT and stuff - please help.

[SourChocolate]

Good evening

I'm a complete newbie in regards to accountancy but need a quick advice. Please forgive my basic questions.

Here is my current situation: I have a ltd company, not VAT registered. Main income source is affiliate marketing at the moment. I anticipate I will need to register with the VAT thingy within the next 6 months (turnover above £60k?).
Also, I has got a job offer as a marketing consultant (contract for 6 months through my ltd company) at a given day rate. It would start within the next 2-3 weeks. Taking into account that additional income I will be above the VAT threshold very soon.

Now my question: let's say we agreed they'll pay me £100/day for my consulting services. Currently I'm not a VAT payer but soon I may be. What do I need to do? Is this £100 net or with VAT?
Or they pay me £100 now and once I'm VAT registered they'll pay me £100 + VAT? Do I need to mention about VAT now and can it be changed later?
Is there anything I need to know or thing about before committing to this role?

It's tricky to me and I need some basic advice.

Thank you.

S.

[taxattack]

Good evening

I'm a complete newbie in regards to accountancy but need a quick advice. Please forgive my basic questions.

Here is my current situation: I have a ltd company, not VAT registered. Main income source is affiliate marketing at the moment. I anticipate I will need to register with the VAT thingy within the next 6 months (turnover above £60k?).
Also, I has got a job offer as a marketing consultant (contract for 6 months through my ltd company) at a given day rate. It would start within the next 2-3 weeks. Taking into account that additional income I will be above the VAT threshold very soon.

Now my question: let's say we agreed they'll pay me £100/day for my consulting services. Currently I'm not a VAT payer but soon I may be. What do I need to do? Is this £100 net or with VAT?
Or they pay me £100 now and once I'm VAT registered they'll pay me £100 + VAT? Do I need to mention about VAT now and can it be changed later?
Is there anything I need to know or thing about before committing to this role?

It's tricky to me and I need some basic advice.

Thank you.

S.

It sounds as though (subject to examination of the details) the new consultancy will fall within the provisions of IR35, for which there are special (and unfavourable) tax rules. You would be well advised to obtain specialist advice on this. You may find the Professional Contractors Group a useful starting point http://www.pcg.org.uk/cms/index.php

Re Vat: presumably the other party is Vat registered, and your company will invoice £100 + Vat, and the other party will reclaim the Vat, so no loss to them.

There is no requirement to be Vat registered until you reach the turnover limit (currently £68k, calculated on a rolling 12 calendar month basis). In this case, your company would simply invoice £100.

However, it may be beneficial to register early if your company can reclaim Vat on its own expenses. Registration can be backdated for up to 3 years, but your company would then need to re-invoice. You can also reclaim Vat on some pre-registration expenses.

In short, there are a number of pitfalls, and I would strongly advise getting professional assistance.

Hope this helps

Chris

[elainec100@cheapaccounting]

Might be worth while looking at a flat rate vat scheme.

An accountant will help with this and for a limited company I am of the view that one is necessary unless you know how to do stat accounts and a CT600!