VAT query - subcontractor new rule

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leelee

Registered User
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i am confused about new vat rule - sub-contractor invoicing principal contractor & accountant not around until next week (and need to do up accounts at weekend)

before sept 1st eg. i invoice principal contractor 1,000 + vat of 130.50. I can therefore offset any vat on purchases/expenses against the 130.50

after sept 1st eg. i invoice principal contractor 1,000 - no vat & with note that they pay the vat

query can i still offset any vat on purchases/expenses against the 130.50 which would have been due on this invoice.
 
leelee said:
query can i still offset any vat on purchases/expenses against the 130.50 which would have been due on this invoice.
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Revenue said:
If you are a subcontractor:
• You will no longer charge VAT to the principal.
• You should issue an invoice* to the principal, which
includes your VAT registered number but does
not include the VAT rate or VAT amount.
• The invoice will also contain the statement “VAT ON THIS SUPPLY TO
BE ACCOUNTED FOR BY THE PRINCIPAL CONTRACTOR”
• You can still claim a refund of deductible VAT incurred for the
purposes of your business in your VAT return.
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As Setanta has clearly laid out you still get your VAT credits, but where this is going to affect some subbies is those who do work exclusively for builders. They will no longer be charging VAT. They will still suffer VAT on inputs. They will accordingly be making net VAT reclaims from Revenue. A lot of smaller businesses are now on 4 or even 6 monthly VAT so there will be a cash flow impact of having to wait to reclaim the VAT on inputs.
 
Graham_07 said:
A lot of smaller businesses are now on 4 or even 6 monthly VAT so there will be a cash flow impact of having to wait to reclaim the VAT on inputs.
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I know of a number of businesses who contacted revenue after being put on a 4 or 6 monthly vat basis, and requested that they were put back on the bi monthly basis.
 
Joe1234 said:
I know of a number of businesses who contacted revenue after being put on a 4 or 6 monthly vat basis, and requested that they were put back on the bi monthly basis.
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One might wonder was the introduction of the new longer VAT periods coupled with the new construction sub-c VAT rules an accidental benefit cash-flow wise to the Exchequer :rolleyes:
 
Joe1234 is correct. Contact collector general on 1890 203070 and request to be put on bi monthly vat returns. have your vat reg no ready before you phone.

The new rules mean that instead of the principal contractor paying you the vat he calculates 13.5% on your invoice and pays it to Revenue instead thereby cutting you out as middle man.
 
If a person is in a permanent repayment situation - they can apply for a MONTHLY VAT return which would provide optimum cashflow advantage
 
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