Sub contracting work?

Randyleprechaun

Hi,

Im a registered sole trader working in the construction industry.

Of late I've been sub contracting most of my work from another contractor. Labour only mostly. This arrangement looks like contiuing for the forseable future.

My query is as follows:

Am I or he breaking any rules in this arrangement. I invoice him detailing that the VAT will be accounted for by him and he pays me the invoiced amount, unless revenue tell him otherwise.

Thanks.

Maidhci

Not clear on what you mean here 'I invoice him detailing that the VAT will be accounted for by him and he pays me the invoiced amount'

Presumably, the invoiced amount that you refer to includes VAT - you must account for VAT on your sales, just as the other subcontractor does.

Alan Shore

The risk is with the Principle, the Principle should ensure that you are not an employee.

http://www.revenue.ie/en/tax/rct/determining-the-correct-employment-status-of-a-worker.html

Alan Shore

Maidhci wrote: »

Presumably, the invoiced amount that you refer to includes VAT - you must account for VAT on your sales, just as the other subcontractor does.

You are not familiar with the reverse charge basis for accounting for VAT between principles and subcontractors in the construction industry.

Randyleprechaun

Alan Shore wrote: »

The risk is with the Principle, the Principle should ensure that you are not an employee.

http://www.revenue.ie/en/tax/rct/determining-the-correct-employment-status-of-a-worker.html

So, does that mean that it would be him that gets into strife and I'm not doing any wrong.

Thanks again

Maidhci

Alan Shore wrote: »

You are not familiar with the reverse charge basis for accounting for VAT between principles and subcontractors in the construction industry.[/QUOTE

Indeed I am, you should possibly read my response before you presume to reach such a conclusion!!!!

J.Ryan

Maidhci wrote: »

Not clear on what you mean here 'I invoice him detailing that the VAT will be accounted for by him and he pays me the invoiced amount'

Presumably, the invoiced amount that you refer to includes VAT - you must account for VAT on your sales, just as the other subcontractor does.

Maidhci wrote: »

Alan Shore wrote: »

You are not familiar with the reverse charge basis for accounting for VAT between principles and subcontractors in the construction industry.[/QUOTE

Indeed I am, you should possibly read my response before you presume to reach such a conclusion!!!!

Because he would not have VAT on these sales as a Subcontractor

scwazrh

Maidhci wrote: »

Alan Shore wrote: »

You are not familiar with the reverse charge basis for accounting for VAT between principles and subcontractors in the construction industry.[/QUOTE

Indeed I am, you should possibly read my response before you presume to reach such a conclusion!!!!

Obviously you are not. Sub contractors do not charge principal contractors vat .so the subbies invoice will say " vat to be accounted for by principal contractor"

If the OP is going to be working for the principal contractor for a period of time with regular weekly payments on labour only basis , I would guess the revenue will have an issue with it.The principal contractor may be held accountable for any tax due but revenue in my experience are very quick to point out that you are responsible for your own tax liabilities .

Randyleprechaun

scwazrh wrote: »

Maidhci wrote: »

Obviously you are not. Sub contractors do not charge principal contractors vat .so the subbies invoice will say " vat to be accounted for by principal contractor"

If the OP is going to be working for the principal contractor for a period of time with regular weekly payments on labour only basis , I would guess the revenue will have an issue with it.The principal contractor may be held accountable for any tax due but revenue in my experience are very quick to point out that you are responsible for your own tax liabilities .

I will be paying my own taxes etc on evrrything

Randyleprechaun

scwazrh wrote: »

Maidhci wrote: »

Obviously you are not. Sub contractors do not charge principal contractors vat .so the subbies invoice will say " vat to be accounted for by principal contractor"

If the OP is going to be working for the principal contractor for a period of time with regular weekly payments on labour only basis , I would guess the revenue will have an issue with it.The principal contractor may be held accountable for any tax due but revenue in my experience are very quick to point out that you are responsible for your own tax liabilities .

I will be paying my own taxes etc on evrrything

Taxuser1

(mod edit) please stop saying you are a tax consultant asking people to PM you.

From what I can see you are person taking second level ACA exams and you've given tax advice on another thread that has caused concerns. If you want to advertise your services please do so through adverts.ie.