Thanks for all your responses everyone. I was hoping for someone to be able to point me in the direction of a definitive answer, but your thoughts have all been very helpful.
In this instance it's a round amount that the employer has agreed to pay in on a monthly basis - it's loosely based on the minimum % that they would have paid under AE but it will not go up or down with any monthly salary variations. It won't change until maybe some point in the future it might be renegotiated if the gross salary was to change substantially. It is not linked in any way to the employee making their own contributions. The employee basically said - "I do not want to join the company pension scheme because I have my own personal pension that I've paid into for years. As well as paying me a salary of £xx,xxx per year, please would you pay £xx a month into my pension as an employer's contribution. The answer was yes.
The employee has opted out of AE and their pension contributions are not being deducted from their remuneration. This is a personal pension scheme that the employee has been paying into by personal direct debit for over 30 years. The employee is continuing to make their personal contributions as normal. The only thing that has happened is that the employee has asked the employer to make employer contributions to their personal pension.
The employee's contributions are not being deducted from their remuneration. This is a personal pension scheme that the employee has been paying into by personal direct debit for over 30 years. The employee is continuing to make their personal contributions as normal.
Thank you - they are genuine employer's contributions. The relevant "Employer Contributions" paperwork has been completed and accepted by the pension scheme.
I read that as the contractor was on FRS - hence the N/A in the first box - the payment to the supplier doesn't hit the vat return at all under current rules.
Well that was what I thought too originally. However I came across something written by Sage which showed the reverse charge rules allowing an input vat claim. I've since spoken to two technical advisers at HMRC who have confirmed that because the reverse charges are dealt with outside of the FRS scheme - it is allowed. When I pointed out that it didn't make sense - they both just said "those are the rules"!!!
The sage thing is at https://www.sage.com/en-gb/blog/vat-reverse-charge-construction/
Number 20 on their list.
As things stand now, without this reverse charge coming in, there is no input vat claim on an FRS vat return (unless there has been £2k capital expenditure).
After 1st October the reverse charge will allow an input claim for the vat on the sub-contractors invoice in my example under the reverse charge rules
My answers
Thanks for all your responses everyone. I was hoping for someone to be able to point me in the direction of a definitive answer, but your thoughts have all been very helpful.
In this instance it's a round amount that the employer has agreed to pay in on a monthly basis - it's loosely based on the minimum % that they would have paid under AE but it will not go up or down with any monthly salary variations. It won't change until maybe some point in the future it might be renegotiated if the gross salary was to change substantially. It is not linked in any way to the employee making their own contributions. The employee basically said - "I do not want to join the company pension scheme because I have my own personal pension that I've paid into for years. As well as paying me a salary of £xx,xxx per year, please would you pay £xx a month into my pension as an employer's contribution. The answer was yes.
The employee has opted out of AE and their pension contributions are not being deducted from their remuneration. This is a personal pension scheme that the employee has been paying into by personal direct debit for over 30 years. The employee is continuing to make their personal contributions as normal. The only thing that has happened is that the employee has asked the employer to make employer contributions to their personal pension.
The employee's contributions are not being deducted from their remuneration. This is a personal pension scheme that the employee has been paying into by personal direct debit for over 30 years. The employee is continuing to make their personal contributions as normal.
Thank you - they are genuine employer's contributions. The relevant "Employer Contributions" paperwork has been completed and accepted by the pension scheme.
Many thanks for your answer
I've found something else as well now
https://www.alterledger.com/flat-rate-scheme-reverse-charge-vat/
I read that as the contractor was on FRS - hence the N/A in the first box - the payment to the supplier doesn't hit the vat return at all under current rules.
Well that was what I thought too originally. However I came across something written by Sage which showed the reverse charge rules allowing an input vat claim. I've since spoken to two technical advisers at HMRC who have confirmed that because the reverse charges are dealt with outside of the FRS scheme - it is allowed. When I pointed out that it didn't make sense - they both just said "those are the rules"!!!
The sage thing is at https://www.sage.com/en-gb/blog/vat-reverse-charge-construction/
Number 20 on their list.
As things stand now, without this reverse charge coming in, there is no input vat claim on an FRS vat return (unless there has been £2k capital expenditure).
After 1st October the reverse charge will allow an input claim for the vat on the sub-contractors invoice in my example under the reverse charge rules