Best tax option for Tradesman?

plasto

Hi, I have just left my employer and about to face the big bad world on my own! I am working on my own, taking one day at a time at the moment. I pay 35% on some of my jobs for builders...but, mostly cash! Should i register for VAT? I have no idea when it comes to tax...i dont even know what the 35% is for!!! HELP

Thanks for your help...cheers!

Baby4

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kluivert

Sounds like you havent regsitered for Income Tax and Paye and RCT (Relevant Contractors Tax).

We all Accountants here.

Baby4

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Kinetic^

kluivert wrote:

We all Accountants here.

There seems to be more and more coming out of the woodwork lately

dam099

Baby4 wrote:

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Not the absolute best example I think. Assuming none is for stock if he used E100 of materials and charged E100 for his work he is not charging anything for labour. Change it to E151 (to allow him something for his labour and take it out of the 2/3 rule) and the VAT becomes E20.39 so almost a nil return. If the labour is marginally more then there will be VAT payable even at 13.5% anything less than E150 and surely the 2/3 rule applies and the work should be charged at 21% anyway.

Baby4

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fintan

Register for RCT and VAT

Having 35% of invoice deducted and a C45 given to you at the of every job is a good way of making sure at the end of the year, you have approximately enough tax already paid to cover your tax bill. (more or less)

I would advice only registering for a C2 if you are very discplined with money, and know that you will need money at the end of to pay your tax bill.

I have seen so many tradespeople regsiter for c2 and then have a nervous breakdown at the end of the year when there accountant shows them there tax bill.

Only other piece of advice would be to stay on top of your receipts, keep them organised and entered onto a spreadsheet or book.

of course find yourself a good accountant and agree a fixed fee for there work.

Best of luck with the new busines.

plasto

Thanks very much for all for your help! I can relaxe a bit more about the whole process! I'll remember you all, when I make my fortune!!!

Thanks again.

chump

plasto wrote:

Thanks very much for all for your help! I can relaxe a bit more about the whole process! I'll remember you all, when I make my fortune!!!

Thanks again.

Are you a plasterer?

plasto

chump wrote:

Are you a plasterer?

I am...are u in need of my excellent plastering skills?

dam099

Baby4 wrote:

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If he charges E100 for labour and E100 for materials then isn't it E200 X 13.5% = E27.00 VAT on Sales less E21.00 VAT on Materials making VAT Payable of E6.00 ?