VAT on contracting

marrakesh

Hi quick easy question for contractors on boards currently doing some computer programming contracting and wondering is it standard VAT rate of 21% i should be charging on my invoices? or is it 13 etc..

thx...

GerardKeating

Originally posted by marrakesh
Hi quick easy question for contractors on boards currently doing some computer programming contracting and wondering is it standard VAT rate of 21% i should be charging on my invoices? or is it 13 etc..

the VAT rate on Professional Services is 21%

But you should only charge VAT if you are registered for VAT.

kdevitt

You should always charge VAT regardless of whether you're registered, you're only obliged to register though if your contracting income exceeds €20K

Victor

Originally posted by kdevitt
You should always charge VAT regardless of whether you're registered, you're only obliged to register though if your contracting income exceeds €20K

Collecting VAT without being registered makes baby Jebus (and eventually you when the revenue commissioners find you) cry. There are different thresholds for VAT depending on whether you are supplying goods or services.

Some other types of contractors (e.g. construction) charge the lower rate (13.5%).

Take a look for similar questions on the Business / Economy / Finance board and look at www.revenue.ie.

Samson

Originally posted by kdevitt
You should always charge VAT regardless of whether you're registered, you're only obliged to register though if your contracting income exceeds €20K

Absolutely not. As Victor says you cannot charge VAT without being registered and have a VAT number (which must be quoted on all invoices). Full stop.
If you do charge VAT without being registered you will be in serious shit, and not just with Revenue*





*Hint: Garda Bureau Of Fraud Investigation.

Stoner

In my line of work we charge 13.5% as most of our work relates to carrying out works that were designed by others and sometimes by ourselves. However if we get someone in to work on PCs or accounting etc we pay the higher rate 21%,
The thing to note is that we take on alot of sub contractors and it is up to us to make sure they have a vat number, if they have none we hold 35% (held by tax office) this makes the guys get their act together and get a vat card/number. If we pay them without checking to see if they have a VAT number we end up paying their vat for them, thats the law, so essentially your clients wont like you very much next april if you charge VAT and dont pay it, not all companies check most companies have been stung once by this.

DaithiSurfer

IT Contracting is 21%.
Do not charge it unless you are registered for vat or in the process of getting registered.

kdevitt

yep...sorry, passed on some duff information I got...

Girl in revenue commissioners told me it should be charged and then paid to the unregistered VAT office, rang back and was told the above....

casper-

Apologies in advance if this information is widely available .. I can't see to find an answer on any sites yet. At any rate, I'm a contractor in Canada where we charge GST (7%) on work that we do. However, there are two methods of repayment ..

a) quick - you only pay the govt ~4% of it at year end
b) annoying - you keep track of all the GST you charge, and all the GST you spend on company purchases, and remit the difference if it's positive

Does VAT for contractors work like that at all? I'm planning on setting up a private limited company once I get to Ireland so I'm trying to learn as much as possible beforehand. Anyone have suggestions for a good accountant in Dublin?

Victor

Professional services are charged at 21%*. You need to keep records and make returns every 2 months.

If the business paid more VAT than it received from customers, they get a rebate. This however is rare, unless your products have a 0% rating (e.g. food sales)

*You do not need to charge VAT on sales if your turnover is below €20,000 (services) or €40,000 (goods), but neither can you reclaim VAT on purchases.

www.revenue.ie has it all.