Apology for the lack of clarity. By 'he' I meant the director of the company who is gifting a part of his share to his key employee. I believe shareholder of a company can gift their shares to another employee under EMI scheme.
Thanks everyone for your inputs. I find out Quickbooks does have a way around to deal with it manually. Just have to put the payable amount in the Adjust link in the VAT return itself. Unfortunately they put some cowboys on the chat who does not bother to go a step ahead and help their customers. The person in the chat advised me to use another software to deal with this situation.
My supervisory body mentioned about various risks and suggested the way to mitigate them. The main reason the individual operating through a UK company is for taking the payments. She is a graphic designer and obtain work from various online platform. So her client located in different parts of the world. As Lebanese currency is extremely volatile, she take the payments either in dollar or in pound sterling. I can get her identity verified using one of the online platform who can verify international individuals . My concern is even after complying with all AML obligation what other issue may put me into trouble. The easiest solution would be not to sign up the client but this will restrict me taking on any client not located in the UK.
Thanks for the valuable inputs from everyone. Apologies for the late response. As per @DJKL if this is turnover, doesn't that bring an issue with corporation tax. Dividends between UK companies are exempt from corporation tax. So, if we treat the dividends as turnover, that will give rise to a trading profit which is taxable. If we disclose the dividends as turnover in the accounts and dividends from UK companies in CT600, that would be contradictory.
Okay, thanks. However, the guidance says if the supply is to the end-user, the reverse charge does not apply. In this case, the flat rate user can still maintain their FRS rate, right?
Sorry I am still a little confused with the interaction between FRS and DRC (and sorry to be a little dumb). Could anybody please give me a working example of a DRC sale made by a business under FRS and a DRC supply received by them. How they will be presented in the VAT return. If a CIS contractor is paying 9.5% VAT under FRS, how can they maintain this rate? I am struggling to grasp the whole concept.
My answers
.
Apology for the lack of clarity. By 'he' I meant the director of the company who is gifting a part of his share to his key employee. I believe shareholder of a company can gift their shares to another employee under EMI scheme.
Let's just say it's only for my learning. After lots of research, I could not find a direct answer hence seek for help here.
It's a kind of self-learning for me and the employer may potentially become a client.
Thanks everyone for your inputs. I find out Quickbooks does have a way around to deal with it manually. Just have to put the payable amount in the Adjust link in the VAT return itself. Unfortunately they put some cowboys on the chat who does not bother to go a step ahead and help their customers. The person in the chat advised me to use another software to deal with this situation.
My supervisory body mentioned about various risks and suggested the way to mitigate them. The main reason the individual operating through a UK company is for taking the payments. She is a graphic designer and obtain work from various online platform. So her client located in different parts of the world. As Lebanese currency is extremely volatile, she take the payments either in dollar or in pound sterling. I can get her identity verified using one of the online platform who can verify international individuals . My concern is even after complying with all AML obligation what other issue may put me into trouble. The easiest solution would be not to sign up the client but this will restrict me taking on any client not located in the UK.
Thanks for the valuable inputs from everyone. Apologies for the late response. As per @DJKL if this is turnover, doesn't that bring an issue with corporation tax. Dividends between UK companies are exempt from corporation tax. So, if we treat the dividends as turnover, that will give rise to a trading profit which is taxable. If we disclose the dividends as turnover in the accounts and dividends from UK companies in CT600, that would be contradictory.
They get work from a few estate agents, did the work and get paid by the landlord. Estate agents get a commission from them to pass the work.
Okay, thanks. However, the guidance says if the supply is to the end-user, the reverse charge does not apply. In this case, the flat rate user can still maintain their FRS rate, right?
https://www.gov.uk/guidance/vat-reverse-charge-technical-guide#end-users...
Sorry I am still a little confused with the interaction between FRS and DRC (and sorry to be a little dumb). Could anybody please give me a working example of a DRC sale made by a business under FRS and a DRC supply received by them. How they will be presented in the VAT return. If a CIS contractor is paying 9.5% VAT under FRS, how can they maintain this rate? I am struggling to grasp the whole concept.