Vat

J

jackruby

Registered User
Messages
27
i have being charging the contractor i work for VAT on the invoices @ 13.5%.
He has being paying me the total invoice amount.

Is there a problem with this?
 
it sounds ok... as long as the work done should be rated at 13.5% (also considering the two thirds rule), and you have done your VAT returns correctly.
 
Vat returns

i thought that you had to have turnover of €37,500 to be vat registered.

Iwasn't near that figure

Is it still ok???
 
Why were you charging VAT if you weren't registerd?

What have you done with the VAT you collected from the contractor? Have you returned it to the Revenue, or pocketed it?
 
jackruby said:
not vat registered
Click to expand...
Major problem for the contractor - he has paid VAT that has been illegally charged and has no valid registration number to reconcile these payments against.

Major problem for you as charging VAT while not being registered is illegal
 
Since September 2008 VAT registered sub-contractors in construction related business ( not sure if the OP is in this field or not from the posts ) do not charge the VAT to the principal contractor, it is handled via the "reverse charge" mechanism.

In this case as presented so far the principal contractor has no VAT input claim on the sub-contractors invoices at all. The sub-contractor is apparently under the VAT threshold and has charged a gross amount, whether that includes so-called 13.5% extra is irrelevant. ( Although showing VAT charged on an invoice while not being registered is an offence) He is liable for Income Tax on his gross receipts less expenses. The Principal gets a deduction against their income tax / corporation tax for the gross payment made to the sub-contractor ( just no VAT claim on it).

Now if the principal has been claiming an input credit on invoices showing 13.5% VAT but no VAT number then it is the principal who has to repay Revenue the amounts they claimed that they shouldn't have claimed. There is then the issue of the prinicpal contractor looking back to the sub-contractor for a refund on the over charging.

A further issue is that while the sub-contractor is under the VAT registration threshold if they decide now to register for VAT they may only do so from now on , not back-register. You cannot back-register when registering while under the threshold.
 
You must log in or register to reply here.
Back
Top