Newbie contract VAT exclusive question

[frank4]

Hi,
New to the world of the contractor, I have set up my limited company and will apply for VAT registration when I have sumbitted my first invoice.

I have been offered though an agency and chose an opt out contract. The terms state my Ltd company "shall be paid on a VAT exclusive basis". Does this mean that I will invoice, and be paid, for my day rate plus the VAT, or does it mean the day rate includes VAT??

I know that this sounds like a dumb question, but I need a bit off reassurance before I sign it.

[Waldorf]

No, you need to add VAT to your rate and invoice them for that.

[SueEllen]

Hi,
New to the world of the contractor, I have set up my limited company and will apply for VAT registration when I have sumbitted my first invoice.

You should apply for your VAT registration now.

[malvolio]

No, you need to add VAT to your rate and invoice them for that.

WTF??? Do you actually understand the applicable law?

You can't charge VAT unless you're registered for VAT. If you intend to register for VAT (or if you think you'll make over £64k-ish gross this year when it ceases to be an option) you should invoice with "VAT Registration applied for" on them and back-invoice for the VAT when you are registered.

Absolute Rule 1 of business: don't piss about with the VATMan

[Sockpuppet]

Remember to add "vat registration pending" to your invoices till you get your number.

Then send an invoice for the vat that should have been paid.

[frank4]

Thanks to all, that very clear and helpful. Just a wee wobble when I read the contract....