Invoicing question

[Eric Mc]

For goodness sake DO NOT accept vouchers. Apart from the fact that you need to declare them as company income (and account for the Output VAT on their value as well) you are laying yourself wide open to IR35 problems.

The key point about IR35 is that, to avoid any misconceptions about your status, you CANNOT be seen to be in any way like any of their salaried employees (full time or part time).

[Lefty]

Eric Mc said:

For goodness sake DO NOT accept vouchers. Apart from the fact that you need to declare them as company income (and account for the Output VAT on their value as well) you are laying yourself wide open to IR35 problems.

The key point about IR35 is that, to avoid any misconceptions about your status, you CANNOT be seen to be in any way like any of their salaried employees (full time or part time).

Indeed

[Shuvi McTupya]

Couldn't your company just sell your 'old photocopier' or something to his company?

I am sure his company wouldn't complain if you forgot to actually deliver it...

[Eric Mc]

Why bother - what would be gained by that?

There is nothing wrong with his company getting an extra amount from a customer. All that needs to be done is that it has to be accounted for properly.

[worsy]

Eric Mc said:

Businesses on the whole don't "claim expenses" from their clients/customers. That's what employees do. Businesses "bill" their clients/customers for the work they do - and raise VAT on their bills/invoices if VAT registered.

A lot of consultancies do invoice expenses.

[Eric Mc]

Nothing wrong with invoicing expenses, either as separate invoices or as part of the normal invoices - as long as they are handled correctly and VAT charged where appropriate. I have seen situations where expenses have been paid to contractors outside of the invoices that the contractor raises - and that is a bit of a no no.

[worsy]

Eric Mc said:

Nothing wrong with invoicing expenses, either as separate invoices or as part of the normal invoices - as long as they are handled correctly and VAT charged where appropriate. I have seen situations where expenses have been paid to contractors outside of the invoices that the contractor raises - and that is a bit of a no no.

In addition contractors on FRS for VAT want their cake and eat it by charging VAT on VAT for expenses.

[Mr Overheads]

Inkyfingers said:

PurpleMoonlight said:

If it were me, I would just thank them for their generosity and invoice from the Ltd for £1000 plus VAT.

Keep it simple.

Agree with this.

The above is how I would interpret it.

I'm assuming he doesn't mean £2600 less VAT = £2167 less 20% CT = £1,733 and then assuming you are paid by dividends withdrawn in current tax year and not a top rate tax payer so 32.5% = £1,170 and presumably the NI payments cover the remaining £170.