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Post Info TOPIC: Sub-contractors
Rainoo


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Sub-contractors
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Hi there,

So sorry if this is in the wrong section, but I have 2 queries regarding sub-contractors relating to Sage.

I am just inputting new information onto Sage from our existing system.  The majority of our "employees" are sub-contractors and when they submit their invoices, there is no VAT.  My first question is this zero-rate sage tax code or tax exempt?

My other query relates to the nominal code used in setting up their supplier information.  Should I make sure the default code is Wages-Sub-Contractors?

I think I know what I am going to do, but need a little hand-holding to make sure I am doing this the right way.

Many Thanks! 



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Stardoe


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Hi there,

I assume you are VAT registered and these sub-contractors are not? If this is the case then I would input them as T1 but with 0.00 in the VAT column, as they are neither zero rated or tax exempt, just not VAT registered (make sense?)

With regard to the code, I would use a code in the 6xxx range as they will be a direct cost.

Just a note...these are not "employees" but sub-contractors and they will not be paid "wages". They will either be Companies in their own right, or self-employed individuals and will be invoicing you for their work.

Hope this helps.

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Pauline
Rainoo


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Hi Pauline,

Thank you so much for your reply. Yes, we as a company are VAT registered, but our self-employed sub-contractors are not. They invoice us on a monthly basis for work done for us so are not "employees" as such, thank you for clarifying that Pauline.

I will change their nominal code and ensure the T1 tax code is used.

It really did help, thank you so much :D

Kind Regards

Rainoo

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Stardoe


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No problem Rainoo. Just another thought....is there any CIS involved?

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Pauline
Rainoo


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Hi Pauline,

I am sorry but I don't know how CIS works?

Is that for construction?

Thanks

Rainoo

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Stardoe


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Yes, it's the Construction Industry Scheme....I assume that there isn't then, as you don't know about it Was just checking.

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Pauline
VinceH


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Contrary to what Pauline says, use T0, not T1.

Both end up in the right place on the VAT return, but if you use T1 you add a potential for error: not noticing/zeroing the VAT.

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Vince M Hudd - Soft Rock Software

(I only came here looking for fellow apiarists...)
Rainoo


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Hi Vince, Thank you so much for posting a reply. I have posted everything as T1 and changed the VAT to zero (!) I had a deadline to transfer my existing accounts into sage as I will be out of the office. So, I will tackle this on my return and change the codes back to T0 if it is possible. Many thanks Rainoo :)

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VinceH


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I wouldn't worry about changing them back to T0 - as I said, they still end up in the right place, and if you have made sure to zero the VAT, then it's fine; no harm has been done.

The problem is that if you continue to do this, then there is a good chance that at some point you will neglect to zero the VAT on one or more transactions - so my advice is to stop doing it, and use T0. (Set the defaults on the supplier accounts for these subbies to T0).

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Vince M Hudd - Soft Rock Software

(I only came here looking for fellow apiarists...)
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