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Freelance journalist VAT question

  • 08-04-2008 7:50pm
    #1
    ThirdEdition
    Closed Accounts Posts: 7 ✭


    I’m a freelance journalist and am a bit flummoxed (freaked) by the question of VAT. I know that a freelancer earning 35k in a year (I expect to earn around 40k in 2008 although I have not yet registered for VAT) must pay VAT of 21%. In my case, this would equate to a figure of around 8,000 overall for the year. I know that I can subtract vat paid on certain expenses but as someone who works from home, these expenses are minimal (broadband, phone bills, bit of petrol but not much more really).

    This would imply that I will be paying way, way more tax than a journalist working for a newspaper. Am I missing something?

    I realise that I am meant to charge VAT but most of the time, a newspaper tells me what they will pay for an article, eg, let’s say a payment of 250 euro for a piece. Some papers ask me to send on an invoice but usually, the money is sent into my bank a/c and I receive a receipt for same. Am I meant to ask the editors I deal with to add an extra 21% to the total? Can’t imagine them agreeing to that, in which case I am paying an extra 21% on all my earnings.

    It doesn’t make sense to me and I am hoping that I have misread the situation in some way. Any advice/info appreciated.

    Thanks in advance


Comments

  • #2
    Gekko
    Registered Users, Registered Users 2 Posts: 1,189 ✭✭✭Gekko


    is the vat rate on services not 13.5%?

    And surely the newspapers will be able to claim the vat back as they'll be vat registered, so it won't be an extra cost, just a formality?

    Although I could be wrong...


  • #3
    leeroybrown
    Closed Accounts Posts: 7,563 ✭✭✭leeroybrown


    Gekko wrote: »
    is the vat rate on services not 13.5%?
    Journalists must charge VAT at 21%. There is a comprehensive schedule of VAT rates.


  • #4
    ThirdEdition
    Closed Accounts Posts: 7 ✭ThirdEdition


    Gekko wrote: »
    is the vat rate on services not 13.5%?

    And surely the newspapers will be able to claim the vat back as they'll be vat registered, so it won't be an extra cost, just a formality?

    Although I could be wrong...

    Is def 21% for journalists. Came across some info from a UK site which implies that you are right re. reclaiming vat, says that "because (almost) all clients are registered for VAT, the work of a VAT-registered freelance does not cost them any more. They claim back the VAT on their inputs from VAT-registered freelances, just as these claim back the VAT on their inputs".

    I don't really get this, tbh - surely it is an extra expense to the publisher, even if he can offset some of the VAT payment? If anyone can clarify the mechanics involved, I'd be mighty grateful...


  • #5
    jdivision
    Registered Users, Registered Users 2 Posts: 4,260 ✭✭✭jdivision


    The fee is usually before Vat is included. Having said that I freelanced for about four years and never once charged Vat and never had to pay it to the Revenue. OP, get an accountant and explain the situation to them. P Ryan & Co (once of Fade Street but now down the docks somewhere I think) do a pile of accounts for freelance journalist and based on my experience you'll save more than they charge you.


  • #6
    ThirdEdition
    Closed Accounts Posts: 7 ✭ThirdEdition


    Thanks for replies guys. I've posted the same query over at the accountancy forum (http://www.boards.ie/vbulletin/showthread.php?p=55638267#post55638267) and received some replies, feel free to add your thoughts...will prob go to accountant sooner rather than later but would like to be as informed as possible before doing so.


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  • #7
    eke
    Registered Users, Registered Users 2 Posts: 4 ✭eke


    Hi, I have been freelancing for sometime now and once you are VAT registered - please get an accountant to do this for you - you just get into the habit of taking 21 percent off your payments.

    The most important thing is that whatever fee you agree with an editor is BEFORE Vat! They dont care about VAT, that is up to the accounts department.

    Best of luck.


  • #8
    angelfire9
    Registered Users, Registered Users 2 Posts: 2,226 ✭✭✭angelfire9


    ThirdEdition wrote: »
    Thanks for replies guys. I've posted the same query over at the accountancy forum (http://www.boards.ie/vbulletin/showthread.php?p=55638267#post55638267) and received some replies, feel free to add your thoughts...will prob go to accountant sooner rather than later but would like to be as informed as possible before doing so.

    I have replied in the accountancy forum, you really should get an accountant asap though!
    http://www.boards.ie/vbulletin/showthread.php?p=55967111#post55967111


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