Subcontractor VAT

wugambinoo

Hello lovely people!


I have a Ltd company working within security industry.


Planning to get some subcontractor which will be trading as Ltd company also and will provide me with security guards to the businesses I have contracts with.



My clients will pay me and I will be paying the subcontractor Ltd company so they will pay guards.


My question is: can I claim the VAT on this basis.


Many thanks

Dean000000

Presumably the company you are trading with will charge you vat?

What is your cis status?

bris

If you're Ltd co is VAT registered then yes you can charge VAT,on services. If you meet the VAT threshold which is a turnover of 85k a year then you have no choice but to register.


If not then don't VAT register as you pay more VAT than you claim back and it can also be more expensive for clients who are not VAT registered so why bother if you don't have too.

Pennywise

Assuming your customers are bigger companies who are already VAT registered, you could register and add VAT to your invoices which they will pay you and then reclaim on their VAT returns. In turn, you pay the VAT on your VAT return to HMRC. So no actual difference to you or them if you're all VAT registered.

If any of your subcontractors are VAT registered, they'll be adding VAT to their invoices which you'll have to pay. If you're VAT registered you can claim that back on your VAT return. If you're VAT registered you can also claim VAT on other VATable expenses such as fuel, telephone, professional fees, stationery, etc.

Whether you're VAT registered or not, if any of your subbies are VAT registered they'll have to add VAT to their invoices which you have to pay.

Unless your customers are small businesses that aren't VAT registered or domestic homeowners etc, then I can't see any reason why you wouldn't want to be VAT registered.

wugambinoo

Im not CIS registered and I don’t need to as far as I know

wugambinoo

My subcontractor and myself are VAT registered same as my customers.

Someone told me that I cannot claim the VAT on my subcontractor invoices which doesn’t make much sense from my understanding.

From what you replied I understand I can and that’s the thing I wanted to know.

Cheers