I have a client that has been given an option to invoice a % of a pubs weekly takings. They are currently managing the pub as employees. In exchange for this they will need to take all the staff onto their books and invoice the % through a Limited Company. The wages will pretty much be their only overhead, as the main pub co will continue to supply the alcohol and cover the marketing costs. They will need to register for Vat. The scheme has been sold to them that they can make money on the Flat Rate Vat scheme.
My question is what rate should they use. The HMRC guidance sheet says "Public Houses however managed" are 6.5%. However, the only cost they will have is salaries, so is it fair to put them on at this rate? Or should I choose 12% being "any other activity not listed"?
I have tried phoning three different Vat Helplines / Registration centre and they say they cannot advise.
My fear is choosing 6.5% then later getting investigated and finding that it should have been a higher rate.
Does anyone know if there is an HMRC number that I could call or any experience of this as to what % to choose?