5% Percent of which price? (1 Viewer)

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I've quoted a company 12 weeks hire on the initial scaffold erect and 5% per week thereafter, what I want to know is should I charge the 5% on the price before tax or after tax?
Cheers, Pete
 
Lol - i take it youve not been up & running long then m8
 
Whatever your contact price is - 5% & then add your vat - i'm not trying to belittle you m8 but tbh after 10 years you should really have a better understanding of you tax liabilities as if you get it wrong it can really come back & bite u in the arse....but this forum is a good source of info as theres many SMEs like yourself on here
 
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Your price is your price the VAT is always included on top of your price as you have to give that to the VAT man ,
It's not yours so to speak .

Are you having 20% tax stopped on every invoice ?
Or are you gross payment ?
 
Stopping 20% on labour charge only for all invoices. There is one company that stops 20% from the total amount instead of the labour charge only because their accountant says we have to have proof that our scaffolders can have the 20% stopped from their wages (whatever that means!) We can't prove it so that means that we have to claim it back at the end of the tax year
 
I Would advise you get a chat with an accountant.
 
Think you may be getting a littlw confused between vat & cis deductions - i think what phil was asking is are you trading as a subcontractor yourself in which case its normal practice for the MC to after vonfirming your utr status to deduct 20% NICs at source (this can be split on a percentage of materials/labour to assist with cashflow but tbh most sme will trade on full deductions as not only does it make paperwork easier but is also good for a big rebate at the end of the year.
Vat on the otherhand although this can be split to a percentage (normally 80/20 or 70/30 as agreed with hmrc) can be a rightous pain in the rear & best to just charge 20% right accross the board - not just for old & refurb work but all new build as well - if your contractor doesnt want to direct them th the hmrc website vat notice 708 section 3:4:2 this will clarify it for them and keep you clear of any backbilling that may occur

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