pennyboy1001
Registered User
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I think the problem is a tax one. if someone is vat registered and then does work for a contractor, they will need a C2, a form of tax clearence. If the sub contractor doesn't have a C2 but is just VAT reg, the contractor is obliged to withhold 35% of the total bill and send it off the the inland revenue. The contractor then gives the sub contractor a deduction cert stating the amount withheld. The sub contractor can then reclaim that amout from the revenue. Its making the revenue aware that the contractor has done there part and its up to the sub contractor to pay their own tax.
Sorry, I don't see the connection between RCT and whether or not the OP is VAT-registered. RCT is administered independently of the VAT system and its application or otherwise does not depend in any way on VAT registration or exemption.
thanks for reply Davy,
Yes, it is 27,500k per annum, but i'm wondering why he's insisting.Is it just because he's used to dealing with bigger clients that would obviously be earn above this level? The amount of VAT we're talking about is about 2000E. The problem as i see it is that they want to be able to claim this back. It should be ok to put bill in with no VAT included,no?
Penny
I think VAT is something that a lot of people struggle with.I agree with Flax, i think the guy in accounts does not totally understand it.
And your answer was...?...
"Ohh, by the way, you've a mistake there. VAT is 21%, where did you get this 13.5%?"
That the 13.5% VAT rate applies to most contractors operating in the building sector and construction work generally.... which lead to an "ohh yeah, I think I've seen that before"... from an accounts department (one really stands out, but there were two other occasions when this has happened) which deals with a significant amount of construction work. Far from the original point, but it does highlight that VAT does tend to cause a little (or lot of) confusion.And your answer was...?
21% vat supply only - 13.5% vat supply and fit
VAT continues to be one of the most problematic areas of taxation for many businesses and the one where the greatest possibility of error occurs.
I have never quoted inclusive of VAT. I don’t know any business to business supplier who does.Would the problem here be that the company thinks the €27,500.00 is inclusive of VAT and that they should be able to claim back the VAT element of the Invoice. Did you make it clear when you priced the job that your figure was ex VAT?
I cannot figure out where you get the €2000 for VAT. What rate of VAT are you talking about?
I have never quoted inclusive of VAT. I don’t know any business to business supplier who does.
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