what VAT rate on Graphic Design Services

yellowmonkey

Hi I have just set up a new Graphic Design business as a sole trader and have registered for vat.
A lot of the work I do will be as a design service for a company that will then manufacture or print the designs themselves.
What VAT rate should I charge for my services?
is it 13.5% or 23%
I understand if I do work and the client is getting brochures, business cards etc direct from myself it is 23% but when it is only a design service and no tangible end product does that come under 13.5% service rate?

Thanks for any help and advice

ABEasy

Professional service so 23%. there is a section on revenue.ie that breaks down each product/service and gives a vat rate for it, if you search 'vat rate on product or service' on revenue.ie you should find it (sorry can't link on mobile).

Interestingly from that page jaffa cakes are classed as cakes rather than biscuits because the moisture content is over 12% therefore they are vatable at 13.5% rather than 23%.

Gloomtastic!

As a sole trader I would recommend you avoid buying print on behalf of clients. You can get quotes for the client but make sure all contracts are between the client and printer. Get a commission from the printer as their sales agent and make sure they include this commission in their quote to the client.

If the client refuses to pay, you will just lose your commission as opposed to being liable for the complete debt.

If you want to offer a print buying service, register as a limited company.

Please don't ignore this advice. :cool:

nompere

ABEasy wrote: »

Professional service so 23%. there is a section on revenue.ie that breaks down each product/service and gives a vat rate for it, if you search 'vat rate on product or service' on revenue.ie you should find it (sorry can't link on mobile).

Here's the link:

http://www.revenue.ie/en/tax/vat/rates/index.jsp

NJS007

Gloomtastic! wrote: »

As a sole trader I would recommend you avoid buying print on behalf of clients. You can get quotes for the client but make sure all contracts are between the client and printer. Get a commission from the printer as their sales agent and make sure they include this commission in their quote to the client.

If the client refuses to pay, you will just lose your commission as opposed to being liable for the complete debt.

If you want to offer a print buying service, register as a limited company.

Please don't ignore this advice. :cool:

Great advice by Gloomtastic... I can point you in the right direction on your printing. If you are interested pm me.... Also meant to say that you may not necessarily need to register for vat if you earn below a certain salary, so keep that in mind....

poiuytsam

what type of grapic designer are you ? there are plently of websites , that re looking for designs , that they pay you a commission on

Hevster

If you want to offer a print buying service, register as a limited company.

Hi Gloomtastic,

Just wondering why you advise setting up as a ltd company if you are a printer as well as a graphic designer?

ie. graphic designer who prints all his own work.

Gloomtastic!

Hevster wrote: »

If you want to offer a print buying service, register as a limited company.

Hi Gloomtastic,

Just wondering why you advise setting up as a ltd company if you are a printer as well as a graphic designer?

ie. graphic designer who prints all his own work.

If you are a printer who also offers graphic design services then you should be a limited company anyway.

If you are trading as just a graphic designer, if your client goes bust or refuses to pay for whatever reason, you will lose out on payment for your time. It may hurt you but, because you will have fewer debtors, then it probably won't kill your business.

However, once you start buying in print, not only is the amount of money at risk increased you are still liable for the ink, paper and machinery suppliers' debts. (Or if you have farmed out some or all of the work then you will owe those suppliers too).

As a sole trader you are personally liable for all your debts. Setting up as a limited co. protects your personal assets ie your house, your car or your pension from debtors.

There are plenty of clients out there that will delight in shafting you. You need to make sure you credit check all your clients, before you do business with them, and set up a strict credit management policy for all clients that you stick rigidly to!

Hevster

Gloomtastic! wrote: »

If you are a printer who also offers graphic design services then you should be a limited company anyway.

If you are trading as just a graphic designer, if your client goes bust or refuses to pay for whatever reason, you will lose out on payment for your time. It may hurt you but, because you will have fewer debtors, then it probably won't kill your business.

However, once you start buying in print, not only is the amount of money at risk increased you are still liable for the ink, paper and machinery suppliers' debts. (Or if you have farmed out some or all of the work then you will owe those suppliers too).

As a sole trader you are personally liable for all your debts. Setting up as a limited co. protects your personal assets ie your house, your car or your pension from debtors.

There are plenty of clients out there that will delight in shafting you. You need to make sure you credit check all your clients, before you do business with them, and set up a strict credit management policy for all clients that you stick rigidly to!

Thanks for the reply,

My situation is that I started as a Graphic Designer farming out my work, then bought all my own printing equipment. But I mainly deal in Wedding stationery and Memorial Cards and I always get a deposit on these jobs. and to date All have collected their orders and paid in full.

So basically less than 5% of my business is b2b leaving the huge majority with members of the public.

Currently trading as a sole trader.

So in my situation would you still recommend ltd company?

Gloomtastic!

In your, pretty unique, situation I would say you might get away with sole trader. The value of each individual order is not going to kill you if they don't pay. Also, weddings are usually paid-for out of saved/available funds. That's why hotels love them I suppose!

Hevster

As I grow I might look at the option of ltd company.. but for now (small fish) will stay as I am.

Thanks for the feedback

Gloomtastic!

Regardless of your tax status, another general rule of thumb when it comes to protecting yourself from going under, is never let any one client produce over 20% of your turnover. If you do you are leaving yourself extremely vulnerable. Something Ireland should have considered when Construction/Property was producing something like 28% of tax receipts. We never saw it coming - absolute bollox!

thecommander

23%. Stay as a sole trader if you're not dealing with huge amounts, but defo get the printer to deal direct with client and you take a cut when it's paid. If you are looking to buy and sell then I'd recommend only doing it with people that have a track record of paying on time. Cannot stress that last bit enough.
Example, think of how many design jobs you'd have to do to cover a 5k unpaid bill.

I've 15 years experience as a designer, then broker, then printer, and have been stung before!

Hevster

Good advice lads..

"never let any one client produce over 20% of your turnover" That seem like common sense.. but good to see a figure put on it.. that wont be a problem with my current business... but I have a few more business plans that I will be rolling out over the coming years where Id imagine that situation could materialise.. will keep that figure in mind tho