Are Investment Banks VAT exempt?

[sthotakura]

Hi,

I am currently in a perm software developer position and got a contract offer from an investment bank and they say I cannot charge them VAT because they are VAT exempt. They also say I will have to use Limited company to provide them with services and I cannot go via Umbrella company/PAYE.

Is this the normal practice with investment banks? Please advise.

Thanks in advance.

[Paddy]

Hi,

I am currently in a perm software developer position and got a contract offer from an investment bank and they say I cannot charge them VAT because they are VAT exempt. They also say I will have to use Limited company to provide them with services and I cannot go via Umbrella company/PAYE.

Is this the normal practice with investment banks? Please advise.

Thanks in advance.

Regardless of the client, if any client is VAT exempt or not registered for VAT; you still must charge them VAT.

[Wanderer]

Hi,

I am currently in a perm software developer position and got a contract offer from an investment bank and they say I cannot charge them VAT because they are VAT exempt. They also say I will have to use Limited company to provide them with services and I cannot go via Umbrella company/PAYE.

That sounds really odd and completely wrong.

Are you actually working for a bank or are you working for an agency that contracts your services to a bank?

[malvolio]

Regardless of the client, if any client is VAT exempt or not registered for VAT; you still must charge them VAT.

Not quite. If you are VAT regisered you have to charge VAT. If you gross over £75k you have to be VAT registered.

I would be very suspicious of a bank of any kind that doesn't understand this, or claims not to...

[sthotakura]

.

Are you actually working for a bank or are you working for an agency that contracts your services to a bank?

Thanks for your reply. The offer is direct for the Bank.

[BlasterBates]

It´s not normal but if it isn´t in the UK and you are working home then yes this may well be the case. I would go and see an accountant. If you elaborate in more depth and post in the Accounting/Legal forum some accountant might give you some clues.

[bless 'em all]

Thanks for your reply. The offer is direct for the Bank.

It's not the bank of Cyprus is it?

You might want to negotiate 7 day terms on your invoice, paid in anything other than Euros.

[d000hg]

Regardless of the client, if any client is VAT exempt or not registered for VAT; you still must charge them VAT.

Not quite. If you are VAT regisered you have to charge VAT. If you gross over £75k you have to be VAT registered.

I would be very suspicious of a bank of any kind that doesn't understand this, or claims not to...

WHS. You only charge VAT if YOU are registered. If you client isn't registered, they have to pay it and it makes you seem 20% more expensive. If they are, they claim it back.

However depending where your client is based, you might NOT have to charge VAT. When I've had US clients, and my current Swedish client, I do not charge VAT.

More details please. Who is client?

[VectraMan]

WHS. My understanding is that you don't charge VAT to anyone outside the EU, but a client inside the EU (but not the UK) you don't actually charge the VAT as long as they're VAT registered in their local country - but you still list it on your VAT return. Reading between the lines it sounds like the latter is probably true.

[sthotakura]

More details please. Who is client?

Thanks for your reply. Client is Morgan Stanley and the location is Glasgow.