DISCRIMINATION AGAINST SMALL SELF EMPLOYED?

[CRAZY K]

Just an odd one here, my son and I are talking to a School about a job --involving both of us.

Apparently according to the contact they would like to use us BUT cannot because they don't deal with
Non vat Registered companies.

ie no VAT number no job.

I have come across this before and it's a misunderstanding by the organisers.

Complete :daft:

Anyone come across this--we have supplied full NI AND tax References to prove we are Bona Fide traders.

My son is dealing with it and less inclined to start asking searching questions😄😄😄

Annoying as we could do with the job.

ANYONE?

Thanks

ALAN
CRAZY K

[Solitaire Events Ltd]

Sounds strange.

Maybe think about incorporating your company - that tends to give a little bit of extra kudos.

[DJ Jules]

ie no VAT number no job.

Is it possible that this comes down to pricing (i.e. if they can't claim back VAT on your quote then you become expensive compared to someone else?)

Or is it all just about proving that you're "legit"? If it is, then they're pretty ignorant. There's precious few kids disco operators (in number) that have the scale required to be VAT registered.

Julian

[Benny Smyth]

Is it possible that this comes down to pricing (i.e. if they can't claim back VAT on your quote then you become expensive compared to someone else?)

Or is it all just about proving that you're "legit"? If it is, then they're pretty ignorant. There's precious few kids disco operators (in number) that have the scale required to be VAT registered.

Julian

I'd put money on the former.

[Pe7e]

Is it possible that this comes down to pricing (i.e. if they can't claim back VAT on your quote then you become expensive compared to someone else?)

Or is it all just about proving that you're "legit"? If it is, then they're pretty ignorant. There's precious few kids disco operators (in number) that have the scale required to be VAT registered.

Julian

It certainly shouldn't be, if you are not VAT registered then you don't charge them VAT in the first place, so it would make no difference to the price they actually pay, ie you invoice them £200, they pay £200 and have nothing to claim back off the VAT man. If you are VAT registered, then you add 20% to your invoice and pay it over to the VAT man, which they subsequently claim back. ie you invoice £200 + £40 and you hand over £40 to the VAT man, they then claim the £40 back (assuming they're VAT registered), if they're not, they have paid £40 that they will never see again, and the VAT man gets to keep it.
The only reason I can see for only wanting to deal with VAT registered traders, is to simplify their bookkeeping. You certainly don't need to be VAT registered to be legitimate, neither do you need to be a limited company.

[Benny Smyth]

It certainly shouldn't be, if you are not VAT registered then you don't charge them VAT in the first place, so it would make no difference to the price they actually pay, ie you invoice them £200, they pay £200 and have nothing to claim back off the VAT man. If you are VAT registered, then you add 20% to your invoice and pay it over to the VAT man, which they subsequently claim back. ie you invoice £200 + £40 and you hand over £40 to the VAT man, they then claim the £40 back (assuming they're VAT registered), if they're not, they have paid £40 that they will never see again, and the VAT man gets to keep it.
The only reason I can see for only wanting to deal with VAT registered traders, is to simplify their bookkeeping. You certainly don't need to be VAT registered to be legitimate, neither do you need to be a limited company.

But if they find a supplier that charges £200 and is VAT registered...

[Pe7e]

But if they find a supplier that charges £200 and is VAT registered...

In that case the supplier is not charging £200, they're actually charging just £166.66 + VAT (ie £200 VAT inclusive) and the client can recover the £33.34 VAT they've been charged, they're not actually being charged £200, which would result in an invoice for £240. For a VAT registered client, it makes little difference if the supplier is VAT registered or not, they either pay £200 with no claw back, or pay £240 and claim the £40 back.

The bottom line for DJs with a turnover of £82,000 + who are dealing predominantly with corporate or VAT registered clients there is little real advantage or disadvantage being VAT registered apart from the administration. The VAT registered DJs with a turnover of £82,000 + dealing with predominantly private clients have a 20% pricing disadvantage since their clients cant claim the 20% VAT back, and consequently act as unpaid tax collectors.

[DazzyD]

This happened to me once at a local pub. They "couldn't" hire me as I wasn't VAT-registered. The crazy thing was I ended up doing the gig as the resident DJ anyway as they went with a multi-op that I sub-contracted to!! :daft: