Subpostmaster

Subpostmaster

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A sub-postmaster's remuneration is paid by the Post Office Ltd based on a core tier and a variable element for different levels of different transactions.

How is this affected by VAT?

Thank in anticipation !

Replies (7)

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By zebaa
27th Mar 2011 12:52

Some are, some are not

Some transactions require vat, some don't. What an odd question. Am I missing something here? Is this what you intended to ask?

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By jpcc1
27th Mar 2011 16:37

Confused

My son is applying to take over a sub post office. His remuneration as sub-postmaster will be paid by Post Office Ltd. As part of his application he has to fill in a pro-forma business plan for the subpost office & associated retail business.

I'm happy with the retail side but on the sub PO side the pro-forma asks him to provide figures for his PO remuneration. The descriptor says:

"Post Office Remuneration less NI Payments & inc VAT (est. 12% as not all VATable)".

So why deduct NI (and pesumably not PAYE as it's not mentioned?) but include VAT ???

 

 

 

 

 

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By petersaxton
27th Mar 2011 23:39

Don't apply yet

Doesn't he want to know the exact financial return he's going to get before applying?

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By jpcc1
28th Mar 2011 09:48

Don't apply yet

A sub-postmaster is paid as an employee by the PO Ltd. He has seen the payslips for the current subpostmaster and we have projected these forward as part of a business plan. (adjusting for past on-off payments, forecast future trends etc). We have carefully budgeted for the reatils side also.

So he has a good idea of the financial return from both the sub postmaster remuneration and the retail side, it's just that the question on the PO Ltd's business plan, as qouted above, is confusing and I'm hoping someone can shed some light on it!

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By petersaxton
28th Mar 2011 10:11

Ask

"So why deduct NI (and pesumably not PAYE as it's not mentioned?) but include VAT ???"

It certainly doesn't make sense to me although I have no experience of accounting for Post Offices. Isn't it best to ask the Post Office?

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By spidersong
28th Mar 2011 16:40

Remuneration and Reimbursement

The VAT mentioned may be to cover the VAT that the shop loses out on by hosting a subpostoffice.

Most retail shops registered for VAT will be able to recover all the VAT they incur i.e. not only on stock, but also overheads, security, capital works etc.

However a subpostoffice is only used partly for the business purposes of the registered entity, and partly for their non-business purposes and so VAT recovery is restricted. So say Joe Bloggs is a retailer (VAT reg sole trader) and a postmaster, they fit a post office counter, or get a new safe for putting the postal order in - no VAT recovery as the cost is not incurred as part of their taxable business, but is instead incurred in the course of their salaried job as a sub postmaster, which is a non-business activity. Likewise when they pay the electricity for the shop, this electicity goes to both the subpostoffice bit and the shop and so should be split accordingly for VAT recovery.

Hosting a subpostoffice can be quite a complex and expensive affair for a retailers VAT accounting.

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By jpcc1
29th Mar 2011 09:49

I Did Ask !

Having posted the original query on Sunday I was able to speak to the PO on Monday (eventually). Their explanations were that

the NI only applies to payments made for staff employed by the subpostmaster (ok, I know what they mean but I don't understand why!!).the VAT only applies if the particular office is liable for VAT. (Again I don't understand this at all, but as this sub office is not registered for VAT then I can ignore it here.)

Thanks for the answers

 

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