VAT taken from wages??

maeeve

I am on a 100% commision but not self employed and i have found out today that im not getting the full 30% commision i was told i would be getting, you get taxed, which at the moment i am not earning enough for this to effect me as only part time, but also VAT is deducted from this too!!??

Does anyone know if this is correct?
I understand when products are sold VAT needs to be payed but for me to have to pay VAT as well, surely this should come off the cost of the service i am giving???

any help much appreciated

paulofessex

Sorry l dont know the answer but may be a call to Customs and Excise may help

paulwf

Sorry I'm a bit confused what you are being paid, could you clarify please? How can you be paying VAT?

Are you being paid 30% of the retail price excluding VAT? If so that is quite common, although that should be stated in the contract if you are employed (if working business to business i.e. self employed pricing is always assumed to be ex VAT).

HO87

Based on what has been posted, as an employee, the OP is entitled to a commission of 30% of the invoice value and this would of course be the ex-VAT value and therefore looks to be a lesser figure than the bottom line of the invoice. I suspect the OP has got the wrong end of the stick.

robredz

It would appear that the OP has been calculating their commission on the bottom line VAT inclusive total, where as, has been pointed out above they will be paid on the invoice less VAT, otherwise the employer would be paying commission on a tax, which is something only Alistair the Badger can get away with (vat on fuel tax)

bap98189

Generally commission only reps are treated as self-employed as then and responsibility for their tax affairs are removed from the company. However, if they are paying you as an employee then yes, your employer will deduct PAYE from your earnings. If you have just started then it is quite likely they will be using some sort of emergency tax code. You need to talk to them about this.

As for commission, it is normal for commission to be paid on the net invoice value. This will exclude VAT. Nobody is going to pay commission on VAT. As far as the company is concerned VAT is cash that goes straight to the government and is normally excluded from all sales figures and commission payments. I would expect your contract to state this, you should check it , but unless it states commission will be paid on the full invoice value including VAT then what they are doing is corect.

robin_banks

I just hope they're paying over the VAT they collect.

bap98189

robin_banks wrote: »

I just hope they're paying over the VAT they collect.

Paying over to whom? If you mean to the inland revenue, I would rather imagine they are. Not doing so is called fraud.

If you mean to the OP, they will not do so unless the OP has a VAT registered business.

robredz

bap98189 wrote: »

Paying over to whom? If you mean to the inland revenue, I would rather imagine they are. Not doing so is called fraud.

If you mean to the OP, they will not do so unless the OP has a VAT registered business.

The OP is an employee but 100% of the salary is commission, they are highly unlikely to be VAT registered. I think they are having NI and PAYE deducted from the commission as an employee.