Hi - if your are setting up for VAT yourself I am not aware of any need for inputting and agents code

Yes they can, but they are really meant for one of kind of rewards such as birthdays or special achievements etc. They should not be looked upon as a regular means of pay. This is not what they were intended for.

sorry did not see your message earlier. Hope you have it sorted now. The system is a little more user friendly now

Hi. Not since Brexit reared its ugly head. If you export to other EEC states you are will advised to set up a One Stop Shop set up with an accounting in Ireland to deal with the VAT on exports. They charge handsmely for this I am afraid

Hi - a bit of a mind bender. You can offset the inport VAT on your UK VAT return. If all your sales are exports from UK then they will be zero rated and you should then get the vat back. You cannot recover UK import VAT agains any EEC vat registrations I am afraid.

Hi Neil You should by now be using digital software to do your bookkeeping and no doubt this will have a reverse charge solution built in. Usually you have to use a a specific vat code designed to cope with this. As you can see feom the video if you have a reverse charge situation the sale should be recorded in Box 6 and nothing in Box 1. If all your sales are reverse charged then you more than likely will be in a vat reclaim situation.

@@debaccountants Hi, thanks for the reply. I was until recently on flat rate. I wrote to HMRC to change to standard rate as going forward we are likely to do more work for a large hotel chain who reverse charge. My accountant has filed the flat rate for me but I'm looking to do the standard rate myself and file myself. I've seen a free MTD software called ANNA to file the return but not used it yet or know much about it? This quarter I should have a vat reclaim as you say, I've only issued the 1 invoice in this period which is reverse charge. I'm finding it confusing what to put in each box if its reverse charge. Also what would I put in each box if I'm doing work for a reverse charge client and client who pays us the vat? Thanks Neil

If you are not VAT registered then rhe reverse charge should not apply to you. If you invoice for £100 material plus £100 dor labour. Ie total charge £200. When they pay you they should deduct 20% on just thr labour element. That is £100 @ 20% = £20. Thus they should pay you £200 minus the CIS tax £20 = £180.

My sympathies are very much with you. There is nothing that is fair in the world of tax. One way or another it is the same - the objective is to take money off you. Such is the world I am afraid.

You cannot link to HMRC for vat unless you are VAT registered. Unless there are very good reasons for registering itis usually best for you not to be. Especially if your customers are not VAT businesses themselves Keep an eye on your rolling twelve month turnover so you know when you breach the registration limit of £85k at which point you will have to register.

You can only set up a VAT part on your tax account if you are registered for VAT. If you are a cafe then you would not want to register for VAT until you were compelled to do so by exceeding the current registration limit of £85,000

@@debaccountants thank you. We get nowhere near that amount 🙂

Simply answered - yes if you and rhe contractor are VAT registered.

@@debaccountants What If the contractor only outsources all construction work i.e installation of kitchens and bathrooms to customers Does this make them an intermediary supplier ? , the contractor has mentioned that their customers are considered to be the end user I.e installing kitchens and bathrooms for B& Q customers?

@@shahzebali4103 If you are charging the end customer then the reverse charge will not apply. If you charge B&Q then it will.

@@debaccountants wouldn't B and Q be an intermediary supplier? What if B and Q confirm they are a intermediary supplier?

@@shahzebali4103 If you are working for B&Q for work for a B&Q customer , then B&Q would not be the end user and if all other conditions apply then the reverse charge woukd be applicable. I'd you work directly for the B&Q customer and you charge the B&Q customer directly then you would be working for the end users and rhe reverse charge woukd not apply.

IR35 is only a concern if you are operating through a limited company. There is no such thing as IR35 if you are simply self employed. Potential employers will resist having you work for them on a self employed basis as this shifts all 4he risk on to them rather than you. A contract that claims to be outside IR35 is only of use where the terms that are included in fit the reality of what happens in contract. If you are offered such a contract they definitely want you to work using your own company, and not be self employed, and any potential downside if they get it wrong falls on you, not them.

@@debaccountants OK I see. Thanks so much for your reply.

@@simonekiernan I forgot to mention that wha II said only apples to cases where your end user is a "Small" Company. For medium and large companies, since April 2021 the responsibility for applying IR35 rests with them. Thus if they do not apply IR35 then the risk falls upon them and not you. Thus you are only at risk if you work for a small company and do not apply IR35 in circumstances where you should.

@@debaccountants So can I take from this: I should work INSIDE IR35 if I am self employed, and taking a contract role if I want to avoid incurring substantial costs?

Yes this is available for sole traders but few use it. This is because they can get better tax relief on recording all motor running costs such as fuel, repairs, tax and insurance, and then apportioning the total between private and business ( this is usually done by their accountant). In addition they can also claim capital allowances on the vehicle. Vans get 100% Allowance in the year of acquisition. Cars only get Capital Allowance on a drip feed each year. The claim for Capital Allowances has also to be adjusted to take out the private non÷business use. You can claim either or whichever gives you the best result. However you cannot opt for mileage if you have already claimed Capital allowances on the vehicle.

@@debaccountants thank you if I were to do it on self assessment myself would that be possible and how would I record it on self assessment.

Anything that you pay for mileage would be included in your accounts as Motor Expenses. You then enter the details of your accounts into your self assessment. Operating without an accountant is unwise in my opinion. However I would say that wouldn't I:)

@@debaccountants I appreciate you advice. Thank you again for your assistance

What do you guys charge for this service. I only started in September. When would I require someone. Now or closer to ássesment

If the reverse charge applies the subcontactor would post an invoice as follows Credit Sales 100 Debit Sale Ledger 80 Debit CIS Tax Suffered 20. They would need to record the sal using the VAT code for reverse charge. When money re received Debit Bank 80 Credit Sales Ledger 80 For contractor the entries would be Debit Subcontractor Cost 100 Credit Purchase Ledger 80 Credit CIS payable 20 The invoice should be posted using a rvere charge VAT code. When paid Credit Bank 80 Debit Purchase Ledger 80

@@debaccountants thank you 👍

Hi Tarquin

The reverse charge is only applicable where the work you are invoicing is either standard rated or lower rated. If you are only working on new builds then as you say your are only making zero rated supplies. Thus the reverse charge provisions have no effect on you at all. You invoice for the total amount of your services plus zero vat just as you have always done. Have you watched my latest videos relating to how Making Tax Digital will impact upon you as a subcontactor?

@@debaccountants thank you for your informative reply, I havent watched your video for MTD as yet but will watch in the near future, regards

Have you subscribed?

No too sure what determines what thwy ask for. But they usually ask for two things. I have seen one being a choice of two out of 3 alternatives. If it is asking you for something that you simply do not have and not providing you with any alternative you will need to call their helpline and ascertain of they have any way round rhe problem

Your more than welcome

Hi Stephen Work on jobs in your own workshop are clearly not caught in the CIS rules. However if you supply and fit in the process of a construction project then you would be caught. If you do not register as a subcontactor then when a contractor contacts HMRC then you would face a 30% deduction rather than a 20%:deduction. This would only be on the labour element not the materials provided that you clearly showed a division of your invoice to itemise the labour cost. Unless the fitting cost was trivial the reverse charge would apply to all your invoice. Whether you are or are not included in CIS would depend upon whether your fitting was part of a construction process. If you were not involved in the construction you quite likely will fall outside CIS. I would suggest you Google CIS and have a good read of the .gov document on this matter and see if your work falls within the CIS definition. If in doubt, and you often are, call the CIS helpline for further clarification though they do often cop out and refer you to the documentation without providing clarification. Unfortunately you are in one of those grey areas where it is not easy to get a clear answer. Regards David

@@debaccountants Thank you for your reply, I have read as much as I can and I’m still not clear. I have spoken to CIS and as you say I was referred to documentation. I’ve never had anyone take any tax off me whether it be 20 or 30%, I pay my tax at the end of the year. I do not separate materials and labour on any invoice. For example I may supply and fit £40k worth of hardwood windows and doors and also a £15k oak staircase, 90% of the labour would be in the workshop making them and then 10% on site. Nobody in 40 years has ever questioned an invoice, but I’m questioning it myself because of this reverse charge vat as it says it only applies to CIS.

@@sshteve Your response does not surprise me. So called experts on the help line are often useless and refer you to documentation that does not provide the answer that you require. CIS would only apply where you work for a contractor. It would not apply to work you do for an end user. Hitherto, there may have been occasions when a contractor should have applied CIS but didn't. In that instance that was not your problem. Any failure to apply CIS rules is his. With the introduction of the reverse charge this really changes the situation as you now need to know if you should apply the revese charge. The danger is applying the reverse charges in circumstances where it should not be. HMRC would come to you for any VAT that you failed to charge. It is far safer to charge the VAT as normal until you get a situation where a contactor rejects your invoice indicating you should reverse charge. You then would need to document a) your contactor is subject to CIS b) he has confirmed to you in writing that he is not an end user, c) your customer is VAT registered. I would also ask him to put in writing why he considers your work should be subject to CIS so you can consider if this is correct. If they insist in applying CIS yiu might consider amending the invoice to show the labour/material split so as to minimise the CIS tax that they deduct. If you are a limited company you recover the CIS tax deducted through your PAYE. If you are not a ltd company then the tax is deducted from your Income Tax liability. Make sure you get lots of documentation should anyone asks you to reverse charge.

@@debaccountants Thanks very much for your help, very much appreciated.

Thanks for letting me know. As long as you got the meaning then that is the most important thing. I am very time pressed at the moment so it is difficult to find time for the videos. However I think they are achieving my aim of trying to provide help for everyone out there. Best regards David

The right to send a substitute that is merely a clause in a contract which isn't or never will be accepted by the end user has been proved to be ineffective in the courts. For substitution to rank as an argument indicating self employment it must reflect the reality of the situation. Using the end user's equipment on its own will not deem you to be an employee but adds to the arguments supporting employment. Remember no one factor is likely to be conclusive on its own. You must take everything into consideration not just one.

If you are self employed and substitute is not qualified, it's your risk. If you are employee, such substitute would be employers risk. Of course, if NDA is involved or your client works on sensitive systems which require background check (like military projects), substitute need to sign NDA with client and get security check clearance. Also, contract can forbid subcontracting, but cannot forbid that you get employee working for you (if your country's self employee organization type allow it). Using engagers equipment for testing i deployment is ok, but not for developement. Even more, if there is any licensed SW on that equipment, you are breaking antipiracy law if licence is owned by engagers.

Hi. The fourth grant is available only you meet the increased requirements for this loan. The conditions are as follows be currently trading but are impacted by reduced demand due to coronavirus have been trading but are temporarily unable to do so due to coronavirus You must also declare that: you intend to continue to trade you reasonably believe there will be a significant reduction in your trading profits due to reduced business activity, capacity, demand or inability to trade due to coronavirus The conditions relates to current and future impact of Covid

Your welcome. Thank you for your kind words.

Hi Jeremy If you feel that you are genuinely in a self employed position then you should appeal against their determination. If they cannot substantiate their view that you have employee status then they should not apply IR35. That is the legal position, however, I think that they saying something else here - as I have seen happen to a number of our clients - the people you are working for are avoiding making a decision relating to IR35 which they see as a risk to them. Instead they are saying to you - if you want a job with us you will do it our way. That is come on the books as an employee, or go through an umbrella company. They seem to believe that an umbrella company will give them some insulation from these measures but I think that is misguided. Even if umbrella companies work legally at the present, HMRC have got a good track record of cheating and moving the goal post to ensure that they do not work in the future. I personally would hate to use an umbrella company - you have no control over what is happening. Your tax affairs are dealt with someone who cares very little about you as an individual and supplies you with little or no information. Given the choice of being employed or an umbrella I would go for the employment. In these situation I think it is a question of bargaining power. I have a couple of clients who are contesting a similar situation and are fully prepare to walk away and find work elsewhere, as they are confident they can. They will look for an opportunity where IR35 will not be imposed, for example working for a smaller organisation. Others do not have the bargaining power to fight their engager. They need the work, and falling in line is the price they have to pay for retaining it. Not a great position to be in.

@@debaccountants3376 Hi David. Many thanks for your input. In terms of employment status (as HMRC) interprets it, as I am a Director/Sole Worker within my own Ltd Company, do I fall under the category of self-employed or employee?

Hi . The size of the company relates to the engager not you as a worker. If you are the engager it would also not apply to you as would only be a small businesses.

Thank you for your helpful comments. We all learn as we go. I have learned a lot fast about making videos. The one in question was done a long time ago. I think I have improved since. However in all this time and thousands of views, you are the only one to mention it. Could it be that the problem is at your end?

Not sure what you mean? Sound was perfectly clear.

@@fireside9549 thanks Tom. We all learn from experience. I've learned how to record sound better. However, as my aim is simply to help people I feel the quality of sound is somewhat trivial.

Thank you. That is what we hope our videos are for all that watch them.

Thank you. I hope it is of help. That's why is I do the videos

You have the option to do monthly Vat returns to ease the impact on your cash flow.

Using a substitute worker, especially if your customer is aware of it and accepts it, is one good indicator that you are self-employed rather than employed for IR35. However all factors need to be taken together and considered not just one of them. If you operate through an umbrella however I am not too sure you will have the opportunity of arguing your point. That is why most people set up their own company rather than using an umbrella company. That way they can get advice from an accountant who they can speak to and thereby have greater control over their situation.