Self Employment

[deadlylampshade]

. .
Lamps,- the flat rate of 13% is that for digging type work, specialist? Must have been either a bloody good year or you put everybody else?s bills through your account

No, it's a training related business...I have a copy of the flat rate list somewhere but it's elusive at the moment...seem to remember that there are dozens of them from 11% upwards. (Although the thresholds will all go up with the 20%)

[BAJR]

Remember Unit, that it is turnover not profit that it is calculated on, so although you may only be taking in 20k a year in profit, it does not take long to rack up a larger turnover. A single job I did once with a company I was an associate in had one job that was over 450k ... one job, and already we were well over the VAT limit. (total profit from the job.. ahem... nearly nothing! but thats another story!

Please note that from 1st January 2010, new flat rate vat percentages apply, depending on your business type. See here for details.
Alongside the standard VAT rules, some small businesses may be better off by operating within the flat rate VAT scheme which has been running since 2002.
The main aim of the flat rate scheme is to reduce the cost of complying with VAT obligations by simplifying the way small businesses calculate their VAT.
In essence, instead of paying Customs the total VAT charged on invoices minus any input VAT you may reclaim, you charge a fixed percentage of your gross turnover and pay that amount to Customs each year.
The fixed rate VAT percentage varies according to the type of business you run; a travel agency would pay 9%, whereas an accountant or IT consultancy would pay 13%.
Notes related to the Flat VAT Scheme

• Businesses in their first year of VAT registration can benefit from a 1 per cent reduction in the flat rate.
  
• You can apply if your annual taxable turnover (not including VAT) will be ?150,000 or less; and your annual total turnover (including VAT) will be ?187,500 or less
  
• If you buy a single capital asset with an invoice value, including VAT, of ?2,000 or more you can claim the input tax on your VAT return in the normal way
  
• You continue to invoice clients at the normal 17.5% rate (from 1st January 2010).
  
• You can voluntarily leave the flat rate scheme at any time
  
• Once you join the scheme you can stay in it until your total business income is more than ?225,000.
  

Whether or not your business would be better off under the flat rate scheme depends very much on your own finances, and the business sector you are involved in. You should always consult an accountant who will be able to advise accordingly. Full details of the applicable rates, together with full guidance and application forms can be found here.

[Unitof1]

As I said hosty average archaeologist in salary earns in the low twenty grand for their time, I don’t see another 50 grand of expenses on top to make a grand turnover of 70000 to drag you into vat registration. Dont see why that should be any different for an average selfemployed archaeologist.

Seems to me that your vat advice is for a RAO or small businesses, not really for self employed archaeologists. If I landed a 450k job it would be best spread over 7 years or if you are going to play with those numbers you will have to be vat registered.

I could feel you resisting good doctor

[SIZE=3]Being VAT registered only makes you less competative if you are working directly for private individuals and competing against others who are VAT registered.

[/SIZE]

Well I mainly work for private individuals. I prefer them to be the landowner, I pass as many costs directly to them such as machine hire charges and don’t rely on any handling (consultancy) fees. I mostly charge by time which it seems can be spread through post ex. To give up a 20% margin would be madness. The reason there is a VAT dispensation is to give those and their business earning less than 70000 help. It seems to me in my circumstances that to charge vat is to bring archaeology into disrepute. Maybe once you have registered it becomes very difficult to escape and so you go around trying to drag everybody else in?

My advise to the self employed archaeologist is don’t register for vat but beware that there is a vat threshold and that its based on a rate of turnover .

Came across this in public web space-maybe it puts to rest that charities don’t charge vat although I have never seen a statement of vat accounting in the charity commission accounts

http://www.google.co.uk/url?sa=t&source=web&cd=21&ved=0CBQQFjAAOBQ&url=http%3A%2F%2Fwww2.basingstoke.gov.uk%2Ftest%2F1088%2F00%2F17%2F36%2F00173665.PDF&ei=j-BhTKjBPIuM0gT-5MHnDA&usg=AFQjCNF3HGLflxXAvLky-hcXYEsXdYI1rQ

savings in the first paragraph nice

any archaeologists out there on a flat rate, -what is it?

[kevin wooldridge]

HMCR are of course onto the fact that some businesses try and avoid paying VAT by offsetting or spreading costs across a number of unregistered individuals or businesses (particularly in the building and construction industries).

I would therefore advise caution in proceeding as suggested by Uof1. If a service is provided exclusively for an archaeological purpose i.e machine hire, it doesn't seem a big leap for HMCR to suggest it more likely to be associated with the business purposes of the archaeologist on site rather than the property owner or some other project sponsor.....but of course you will probably get away with it until you are either caught or dobbed in by a business rival ...

[Unitof1]

[SIZE=3]some businesses try and avoid paying VAT

[/SIZE]
but i like most archaeologists try to pay the correct amount of tax

This thread is not about tax avoidance for businesses but about legitimate tax responsibilities for selfemployed archaeologist. The government gives an incentive to support people in work of a vat exemption for turnovers less than ?70000 a year. This level has been increased roughly by a ?1000 a year for the last ten years to encourage people to enter and survive in the work place.

70000 a year can be divided by 365 days of a year to produce a “you might have to register for vat rate” of: ?196.62921348314606741573033707865 per day. Does that mean that if you receive any cheque for more than this amount on any day in the year that you should register for vat tax as you is obviously beyond the threshold.

No

[SIZE=3]HMCR are of course onto the fact that some businesses try and avoid paying VAT by offsetting or spreading costs across a number of unregistered individuals or businesses (particularly in the building and construction industries).

[/SIZE]

(Notice that they are not spreading their cost across time-because this statement is about a year ending account rather than a rate)

Those selfemployed archaeologists who are trying to avoid vat are obviously turning over more than ?70000 a year- how does this come about when the predominate expense is their time and the average salary is about ?20000. I undertake archaeology for a client who has the obligation to undertake archaeology. If they need to hire a machine to enable me to odserve archaeologicakl horizons it is not my expense. They are paying for my licence for my copyright. Nothing to do with machines.

If we take the wonderful tender recommendation pdf link of my previous post: to undertake 100 evaluation trenches of 25ms by 2ms ( with a contingency of an extra 1000 metres) we get a one form of cost of ?210 per trench after the machining and welfare costs are taken out -which is presented as a possible legitimate saving.

If you undertook the trench on the price of ?210 you would have to register for vat,

If you undertook the trench on the basis of one person for two days (?105/day) if there is anything there or not you would not have to register for tax. If this is tax avoidance what else should I be claiming.

If you suspect a VAT fraud

If you suspect that a firm is avoiding paying VAT, or of charging VAT when they aren't VAT registered, you can report them in confidence on the Customs Confidential hotline, 0800 595 000, open 24 hours, seven days a week.

You don't have to give your name or any personal details.

Businesses that may not charge VAT

Businesses with annual sales below ?70,000 (2010-11) don't have to register for (and therefore charge) VAT, but they may choose to do so voluntarily. If they don't, the price you pay for their goods or services will be cheaper by 20% than if you bought the same goods or services from a VAT-registered supplier.

[BAJR]

To return to the nub of the question... The source for self employment and tax have been well covered, and VAT... if you may turnover more than 70k then you will need VAT if not, it is up to you. Of course if you are VAT registered, then the Petrol, the tools, the hire, the equipment, etc you get the VAT back... and you charge VAT on your services, which the customer can then claim back.


BAJR is not VAT registered. My Consultancy is not VAT registered, my Partnership is as a couple of contracts a year would push us over the VAT... but that is not to say I make 35k a year... rather that our turnover would be.

Its not hard.

[Unitof1]

http://www.ukbusinessforums.co.uk/forums...p?t=129537

presumably the businesses are not related

[BAJR]

Very good Uo1

Indeed if you do have multiple businesses they must be discreet companies that are not related. Some people try to spread income by having different companies but all doing the same thing roughly.

We have a

Toolstore an advertising company an archaeological consultants and a Partnership in a digital media/web

So each is discreet and separated - very important.

Only one is VAT registered currently. ALways Always keep your nose clean, get advice, talk to the VAT and the Tax office... discuss what you do... and you will have no worries.

The basic premise is to get advice and not be scared to talk to them. Hide nothing, as one day... you may regret it.

Simples!

[deadlylampshade]

ALways Always keep your nose clean, get advice, talk to the VAT and the Tax office... discuss what you do... and you will have no worries.

The basic premise is to get advice and not be scared to talk to them. Hide nothing, as one day... you may regret it.

Simples!

Very good advice...an associate of mine had a VAT inspection team knock on his door...for the sake of a few quid, it really isn't worth risking because if they have a suspicion of malpractice, they'll find it and then be all over you like a ton of bricks.

And if you screw up your return and pay too much, they do send it back to you! My accountant failed to point out I could claim 1% in my first year, and the VAT office sent me the excess I had paid at the end of the year without me having to ask!