Postby Lambs » Tue Apr 11, 2017 6:53 pm
Sorry, you're right. I should have said more.
Succinctly, you might not like the shortest distance between two points.
I suggest you read the advice your accountant gave you. You will probably have paid for it. It may well be very good advice.
At the risk of boggling your mind - or worse, boring you:
There is basically no relationship between what you pay in commission (or for anything else, for that matter) and what you decide to invoice on for your services. Charge whatever you like. Except that if you invoice too little, you'll lose money, and if you invoice too much, then you'll be uncompetitive.
There is no 'device' by which you can avoid charging VAT on your invoice or part of it. That is the whole point of VAT: if you charge more for your services, then you have to charge more VAT. (There's a thing called "disbursements" but someone charging YOU commission does not smell like a disbursement to me. If the commission were chargeable by reference to your client, it *might* be a different matter.)
When you raise a sales invoice, there is no particular need separately to identify any of your own costs in that invoice. You can do it to say, "look, I've incurred these additional costs", but it doesn't make a difference from a VAT perspective. If you get an invoice from your accountant, does it include his office rental costs, his BT bill, or the VAT on his car?
If you're a 3D designer then you are presumably charging VAT to business customers. In which case they may not care less how much extra VAT you charge, because they can reclaim all of it. The exceptions would be:
Private homeowners
Businesses that are exempt, such as BTL landlords
Other businesses also operating on the Flat Rate Scheme
But architects, property developers and the like will generally be able to claim all of their VAT costs (i.e., on your invoices). Of course the VAT element reflects your underlying professional fee. So, VAT aside, we are back to the competitive/uncompetitive issue.
I think you dislike the extra VAT cost to you. It's an extra cost you cannot reclaim because you are on the Flat Rate Scheme. The percentage you are on for your sector is supposed to cater for VAT on the costs your kind of business will typically incur. If it is costing you too much, then you can always leave and operate VAT in the normal way.
Regards,
Lambs