grumpy wrote:
I'd probably need my money minded compadre to help with a more concise answer, but we draw in approx £2k in radio fees this is income subject to vat. From that income all the office costs including wages are paid. So in my eyes we pay vat on wages. I may be wrong, but it's how I've always read it. My treasurer reads it differently, but he would;-)
so youve 20 radios out on rent?
VAT registration is mandatory in your case (about £77,000 or £1500/wk)
Do you issue a VAT receipt for each settle/rent? (your acting illegally if you charge VAT but dont issue a VAT receipt if asked for one)
If each owner pays £100/wk inclusive of VAT you just owe the VATman £16.66/wk but any VAT you pay OUT comes out of the £333/wk your collecting, so the VAT for fuel, leccy, phones, company car leasing, etc, etc, you reclaim out of the VAT the drivers hand to you. You can place all the VAT collected in a high interest savings account and have the interest as an income.
OR....You could downsize under the VAT limits, deregister and not enter the world of VAT and keep all the £100/rent
That I can just about follow. Hence all the financial stuff I leave to him. I know what you're saying is right, because he's told me it before. I just have this daft notion that if a company is small enough the wages should be deducted from the total take before VAT is levied. But I also am aware that it's a non-starter of an idea. But I like it.
Only one driver asks for and gets a receipt.
Login
Register
FAQ
