Hello! About to take the contracting plunge

[tapir]

Hi everyone, I've been a lurker here for a few days, so now it's time to be polite and step out into the light

first off, I've learnt so much from the main site and these forums, so a massive thank you to everyone concerned. After many years as a permy in software development, I've decided to take the plunge and contract my services out. I've decided that I need to form a limited company, have a short list of accountants to research, will probably need a VAT number, and still keep coming up with new questions. I couldn't find a specific answer, so hopefully I'm not posting a duplicate questions here.

Assuming I land a contract, when I submit a timesheet/invoice:

If I'm contracting direct to the company, and my day rate is agreed at £300, I assume that £300 is inclusive of VAT, or does that get charged on top, and the company and myself then claim this back?

If I'm contracting via an recruiter who has placed me at said company, do they pay me based upon my submitted timesheet/invoice, or does the company I am contracted to do this?



Really sorry if this is one of those facepalm questions!

Thanks in advance for any advice/flames

Tapir.

[northernladuk]

Hi everyone, I've been a lurker here for a few days, so now it's time to be polite and step out into the light

first off, I've learnt so much from the main site and these forums, so a massive thank you to everyone concerned.

As long as you have learned about bleeding radiators, gladiators and guinea pigs the rest is just rubbish.

After many years as a permy in software development, I've decided to take the plunge and contract my services out. I've decided that I need to form a limited company, have a short list of accountants to research, will probably need a VAT number, and still keep coming up with new questions. I couldn't find a specific answer, so hopefully I'm not posting a duplicate questions here.

Please search before asking basic questions. They have all been done many times. There is a sticky about how to search at the top.

If I'm contracting direct to the company, and my day rate is agreed at £300, I assume that £300 is inclusive of VAT, or does that get charged on top, and the company and myself then claim this back?

It is 300+Vat if you are VAT registered on the FRS (which you should) You chrage VAT then you pay it back to the VAT man quarterly at a few per cent less so make a profit on it.

If I'm contracting via an recruiter who has placed me at said company, do they pay me based upon my submitted timesheet/invoice, or does the company I am contracted to do this?

Your contract is with the agent not the client. He pays you. How much the client pays the agent is their business. Signed timesheets are gold dust so make sure they are in on time etc.

Read about Opt In/Opt out and IR35 as soon as you can.

[TestMangler]

Hi everyone, I've been a lurker here for a few days, so now it's time to be polite and step out into the light

first off, I've learnt so much from the main site and these forums, so a massive thank you to everyone concerned. After many years as a permy in software development, I've decided to take the plunge and contract my services out. I've decided that I need to form a limited company, have a short list of accountants to research, will probably need a VAT number, and still keep coming up with new questions. I couldn't find a specific answer, so hopefully I'm not posting a duplicate questions here.

Assuming I land a contract, when I submit a timesheet/invoice:

If I'm contracting direct to the company, and my day rate is agreed at £300, I assume that £300 is inclusive of VAT, or does that get charged on top, and the company and myself then claim this back?

If I'm contracting via an recruiter who has placed me at said company, do they pay me based upon my submitted timesheet/invoice, or does the company I am contracted to do this?



Really sorry if this is one of those facepalm questions!

Thanks in advance for any advice/flames

Tapir.

At the risk of sounding like NLUK, these statements and questions don't belong in the same post.

Welcome to the forum

[TheFaQQer]

It is 300+Vat if you are VAT registered

Not necessarily, but typically this is correct.

There has been at least one thread here that I remember where someone assumed that they were quoting an ex-VAT rate, but then found out that the agency had been a bit sly and were quoting a VAT inclusive rate.

I must admit that that's an anomaly, though. I remember asking my mate the same question, though, when my first invoice got paid - I'd assumed that it was VAT inclusive, and then an extra wodge of cash turned up in my account

Make sure that you read the contract and / or schedule carefully to make sure you don't get any nasty surprises.

on the FRS (which you should) You chrage VAT then you pay it back to the VAT man quarterly at a few per cent less so make a profit on it.

You'd have to do the sums, and it might be worth waiting until you have bought any start-up items and claimed the VAT back before moving over to FRS.