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Thread: UK Consultancy - VAT etc...

  1. #1
    "Certified" Alphaholic NoeticCC's Avatar
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    Andrea Gill
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    Default UK Consultancy - VAT etc...

    Hiya,

    I'm doing a consultancy/web development project in my spare time and will need to start invoicing them for my work - could someone in the UK PM me with the basics about how this all works VAT- and tax-wise?

    Andrea

  2. #2
    Member Bob Whitaker's Avatar
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    Bob Whitaker
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    Default Re: UK Consultancy - VAT etc...

    Hi Andrea,

    I think I am right in saying that you would have to be invoicing your client(s) for more than £55,000 per annum before you have to consider any VAT implications.

    Bob Whitaker

  3. #3
    Member Bob Whitaker's Avatar
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    Bob Whitaker
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    Default Re: UK Consultancy - VAT etc...

    Andrea - forgot to mention - assuming you are employed on a PAYE basis i.e. your employer deducts income tax from your pay, you will need to declare and pay tax on any earnings you make outside of your regular employment. This will vary from 20% up to 40% depending on your circumstances. To do this you would need to contact your tax office and tell them that you have additional income and ask them to send you a tax return form at the end of the tax year.

    As the old saying goes "There are only 2 certainties in life - Death & Taxes"

    Bob

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    "Certified" Alphaholic NoeticCC's Avatar
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    Default Re: UK Consultancy - VAT etc...

    Quote Originally Posted by Bob Whitaker View Post
    Hi Andrea,

    I think I am right in saying that you would have to be invoicing your client(s) for more than £55,000 per annum before you have to consider any VAT implications.
    I should be so lucky!!! ;)

  5. #5
    "Certified" Alphaholic NoeticCC's Avatar
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    Andrea Gill
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    Default Re: UK Consultancy - VAT etc...

    Quote Originally Posted by Bob Whitaker View Post
    Andrea - forgot to mention - assuming you are employed on a PAYE basis i.e. your employer deducts income tax from your pay, you will need to declare and pay tax on any earnings you make outside of your regular employment. This will vary from 20% up to 40% depending on your circumstances. To do this you would need to contact your tax office and tell them that you have additional income and ask them to send you a tax return form at the end of the tax year.

    As the old saying goes "There are only 2 certainties in life - Death & Taxes"

    Bob
    Thanks I will do that :)

  6. #6
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    Tony Rutherford
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    Default Re: UK Consultancy - VAT etc...

    Andrea,

    Even if your turnover is below the VAT threshold, you can still apply to HMRC to register for VAT.

    The advantage of being registered for VAT is that you can reclaim VAT paid on your business purchases.

    Whether VAT registration is a good idea for you depends on the type of customers you are selling to. If they are individuals or non-VAT registered businesses, they can't reclaim the VAT you charge them, which will make your prices less attractive. On the other hand, if you are selling to other VAT registered businesses, they can reclaim the VAT you charge, so they won't be affected by your VAT status.

    It is a good idea to get professional advice from an accountant about setting up your own business, even if it is only a part time occupation. An accountant will be able to tell you about the tax allowances for various types of business expenditure, e.g. purchases of vehicles & IT equipment, use of part of your home for business purposes etc., and can advise you on common mistakes to avoid.

    There are also plenty of good books and helpful websites on the subject.

    Tony

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