VAT & IR35

knowledgeispower
knowledgeispower Just JoinedRegistered Posts: 32
in VAT
Hi All,

I have an IT contractor who has his own LTd co (VAT Registered) and have been caught by IR35 this April; Therefore he now works through an umbrella company. Q: should VAT be paid to him with his wages on his payslip? If not, how do yo account for it on his VAT return? Thanks in advance

Answers

  • TaxAdvisorWB
    TaxAdvisorWB Registered Posts: 1
    If your client is working through an umbrella company it is likely he will be an employee of the umbrella company, rather than invoicing them for the work. The employment income would be like any other, it would not form part of his turnover but would be reported through the employment pages of his SA return.
    https://www.gov.uk/guidance/working-through-an-umbrella-company
  • douglasstroud
    douglasstroud Registered Posts: 216
    But as far as I am aware if they are receiving the payments through their Ltd Co and they are VAT registered then they will also have to charge VAT on their services
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