J
jj476
Guest
I have been asked to tender with 5 consultants (all sole traders) on a small project worth 40,000 euro. We will all be paid equally (1/5th).
The project will be subject to professional withholding tax at 20%. We were wondering what the fairest way to split the money. One person ( a sole trader) will invoice they will be paid the 40k, they will then get 32k and a cert stating they paid 8 k in tax for. The full amounts will be invoiced this year.
We have agreed to split the proceeds equally including all costs. So each person should get 8000euro before tax. For the purposes of the exercise we will keep all figures ex.VAT.
In short should we (a) invoice the main person for 8000, get paid about 6400 euro by that person
and wait until they get their tax in order next year for the 1600 remainder,
(b)Pay the lead consultant for the cost of the capital to pay the 4 team member for the year while the lead person holds the debt. This would be 32k for the team at say 14% ( AIB Overdraft rate) for the year this would be about 4 k. On the basis that the lead consultant receives 32000 after the professional withholding tax is deducted, the other consultants would then invoice the head consultant for 7200 euro total in total 28800 euro. The lead consultant would get less as they would receive 3200euro and a professional withholding tax cert for 8000.
(c) none of the above.
Thanks for any contribution on this. Thanks
The project will be subject to professional withholding tax at 20%. We were wondering what the fairest way to split the money. One person ( a sole trader) will invoice they will be paid the 40k, they will then get 32k and a cert stating they paid 8 k in tax for. The full amounts will be invoiced this year.
We have agreed to split the proceeds equally including all costs. So each person should get 8000euro before tax. For the purposes of the exercise we will keep all figures ex.VAT.
In short should we (a) invoice the main person for 8000, get paid about 6400 euro by that person
and wait until they get their tax in order next year for the 1600 remainder,
(b)Pay the lead consultant for the cost of the capital to pay the 4 team member for the year while the lead person holds the debt. This would be 32k for the team at say 14% ( AIB Overdraft rate) for the year this would be about 4 k. On the basis that the lead consultant receives 32000 after the professional withholding tax is deducted, the other consultants would then invoice the head consultant for 7200 euro total in total 28800 euro. The lead consultant would get less as they would receive 3200euro and a professional withholding tax cert for 8000.
(c) none of the above.
Thanks for any contribution on this. Thanks