Question about C35

[egw]

My husband is self employed and works on a c35 basis,we are in the process of changing accountants so have got his files to forward to new acc,,,,,,,,but a few things look a bit strange,firstly he is paying 13.5% vat on his earnings ontop of the 35% thats already deducted,and secondly the accountant has put in his gross income figures in for his total net sales(income).does this sound right to anyone...all this is over my head but thought it a bit weird

 

[papervalue]

My husband is self employed and works on a c35 basis,we are in the process of changing accountants so have got his files to forward to new acc,,,,,,,,but a few things look a bit strange,firstly he is paying 13.5% vat on his earnings ontop of the 35% thats already deducted,and secondly the accountant has put in his gross income figures in for his total net sales(income).does this sound right to anyone...all this is over my head but thought it a bit weird

in late 2008 i think their was a vat change where principal contractor self accounted for the vat, so the sub gross would be same as net as principal contractor paid over/reclaim vat element( the principal accounts for the 13.5%)

in sub vat return more than likely he would have being in refund situation if all work done as sub for a principal.

 

[egw]

even though he is c35 he has always been the sub contractor ,never the principal contractor

 

[Paddy199]

The way C35 works, Revenue don't trust subcontractors so they deduct 35% of the payment so that there will be enough in the pot to meet tax liabilities at the year end.

Firstly, the 13.5% is fine. VAT is on the gross sales. C35 deduction is on the payment. Think of C35 as going into a pot for now but has nothing to do with VAT.

Paper value is correct. From 1 Sept 2008, again as Revenue don't trust subs, principals account for VAT on purchases from subbies i.e. subs no longer charge VAT on sales. This means you have only to worry about claiming VAT on purchases, etc and getting a refund of your C35 at year end.