Clean It Up
UK Window Cleaning Forum => Window Cleaning Forum => Topic started by: mike1986 on December 28, 2014, 10:33:37 pm
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When you rent out work, does the person renting still trade under your business name?
If so do you have to declare the full amount in your turnover? or just the amount you are receiving as rent?
Basically just wondering if this would be a good way of staying under the VAT threshold.
Any advice would be much appreciated
Thanks
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When you rent out work, does the person renting still trade under your business name?
If so do you have to declare the full amount in your turnover? or just the amount you are receiving as rent?
Basically just wondering if this would be a good way of staying under the VAT threshold.
Any advice would be much appreciated
Thanks
For that to happen, I reckon the the one renting from you needs to run it as part of his own separate business while paying you the agreed amount out of his turnover. This could be a problem unless it's someone who is extra trustworthy because it would mean people who are really your customers paying him. I never had this problem when renting from someone else because they were already VAT registered.
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Why would you declare the round in your turnover if it isn't in your turnover?
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Hi Pdale
is your email link on your website working ok
have sent a couple of emails recently and not heard back from you
regards
John
stracey_john@yahoo.co.uk
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When you rent out work, does the person renting still trade under your business name?
If so do you have to declare the full amount in your turnover? or just the amount you are receiving as rent?
Basically just wondering if this would be a good way of staying under the VAT threshold.
Any advice would be much appreciated
Thanks
Having been on both sides of this question all I can say is that it is a very grey area.
Your best bet would be to speak to an accountant.
They won't say either way (as there isn't any real legislation) but will advise you on the best course.
Having a lad work part of your round is a very different proposition to having 5 lads working and paying them cash so it doesn't reflect on your TO.
The galling part is that different people working for HMRC will interpret the guidance in different ways.
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We do this, technically it is still your turnover, especially if the bacs payments are going into your account, the rental/subcontract fee is a cost to you only, unfortunately vat is based on turnover not profit, however if the clients were to pay the subcontractor directly he could then perhaps pay a commission fee back to you but obviously a lot of trust between the two of you for this to work, this would obviously weaken your turnover and keep you below the threshold
Graham
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You only need declare the amount you get paid from the subby as the turn over is not yours. The amount you are are paid is then part of your turn over. But most would just get a cash payment. If this helps.
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Hi Pdale
is your email link on your website working ok
have sent a couple of emails recently and not heard back from you
regards
John
stracey_john@yahoo.co.uk
Yes it does work, I have no record of your emails. It is set to Out of Office over the xmas period but still showing up emails received.
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You only need declare the amount you get paid from the subby as the turn over is not yours. The amount you are are paid is then part of your turn over. But most would just get a cash payment. If this helps.
Thats not true bud.
Its what a lot of guys do, but its the grey area i spoke of.
If you're 'Smith's Window Cleaning' and the customer has "smith's' as their point of contact, it could (and probably would be) argued that you are the employer and should then go down the employer's route.
You end up being done on 2 levels-1 for not employing properly and 2 for not declaring the VAT that would be owed.
Im not looking to argue with you but don't want the OP to think that if he does it it will be ticket boo.
He won't. (well, he may be for a bit but if HRMC find out, they'll screw him)
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I believe there are only two safe (i.e. legal) ways to do this. Either use an established sub-contractor who already has his own registered business, allow him to invoice the customers as his own and then pay you a sum in consideration of the business you provide, or franchise.