Hi all, I'm new here and my name is Dan!
I was contacted by an agency about a 6 months IT position in London (where I would need to move to). I said that I could be interested if the rate was so that I could make at least 100K/year gross. They came out with a daily rate of £416/day, which looked a bit low to me (my accounting would be; 100,000/220 = 454), and on which according to them I would only pay "a 20% tax rate". I did a phone screening interview with the customer and was invited there for a face to face, with a an offer raised to 436/day.
But at that point I asked to understand better what I would actually pay in taxes, and after insisting with questions (they were rather evasive) they admitted that the quoted daily rate was VAT included. Which, from my experience in continental Europe, is something I've never heard of; but they insisted it was standard practice in the UK to advertise daily rates VAT included (which IMHO doesn't make sense, because the customer can reclaim VAT anyway, and the contractor could even not pay and charge VAT at all from what I read about the UK).
So I have two questions:
I'd like to know about this before getting really angry with them
Thanks!
I was contacted by an agency about a 6 months IT position in London (where I would need to move to). I said that I could be interested if the rate was so that I could make at least 100K/year gross. They came out with a daily rate of £416/day, which looked a bit low to me (my accounting would be; 100,000/220 = 454), and on which according to them I would only pay "a 20% tax rate". I did a phone screening interview with the customer and was invited there for a face to face, with a an offer raised to 436/day.
But at that point I asked to understand better what I would actually pay in taxes, and after insisting with questions (they were rather evasive) they admitted that the quoted daily rate was VAT included. Which, from my experience in continental Europe, is something I've never heard of; but they insisted it was standard practice in the UK to advertise daily rates VAT included (which IMHO doesn't make sense, because the customer can reclaim VAT anyway, and the contractor could even not pay and charge VAT at all from what I read about the UK).
So I have two questions:
- is quoting a rate "VAT included" really a common (if not standard) practice in the UK? From searching the internet it looks like that's not the case, but I didn't find a very clear confirmation
- if you're getting paid let's say 100K/year VAT included (ie 83K + VAT) with your own Ltd company, is the "20% tax rate" even close to realistic?
I'd like to know about this before getting really angry with them
Thanks!
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