Help with rent question?

[Thompson24]

I have a member of staff who has asked me if instead of being employed if she can be commision only (rent a chair) she wants 40% of colours (using my stock) and 50% of cuts and 10% of all retail she sells

My question is if I work out her take home commision would it be based on her take inc vat or without vat? Ie if she earned £1000 this week in cuts would I take off her 50% off the £1000 or would I take it off £800 (ex vat)

Can anyone help as I'm confused

 

[squidgernetball]

Its entirely up to you. If you're vat registered you can either add it onto what she pays you or you can deduct it out of what she pays you. Obviously one way costs you more and the other costs her more.

We are only just going vat registered so I either have to take the hit of paying vat or increase all my prices by 20% which is a hefty hike.

As long as you pay your vat it doesn't matter how you charge her.

Vic x

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[Beckybee]

Forget the vat q for a min.

Are you ok with her going self employed, you could lose money.

You can say no if you want to.

 

[vividamnesia]

It depends on whom files the tax/vat for everybody. Does the shop typically file the total sum for all staff/product etc. @ tax time.....Or does each staff member file their own tax/vat @ tax time?

Most shops cover the filing of the total shops tax/vat for all as whole as the owner is registered as a business & has all the records. It seems easier this way from my experience. You would base her commission on the before tax/vat value. If shes wanting a 40% on color/chem services its a bonus for you as you get the total cost of the color to write-off inc. vat.She will file her personal costs for supplies used that she purchases not supplied by you herself.

If shes registered as a business & files her own vat, needs receipts for her product costs,color included as purchased from you(difficult to total properly in this situation) then pay would be based on tax/vat inc. amount.
Hope this helps.....I'm in Canada though but it seems a similar situation!

 

[squidgernetball]

It depends on whom files the tax/vat for everybody. Does the shop typically file the total sum for all staff/product etc. @ tax time.....Or does each staff member file their own tax/vat @ tax time?

Most shops cover the filing of the total shops tax/vat for all as whole as the owner is registered as a business & has all the records. It seems easier this way from my experience. You would base her commission on the before tax/vat value. If shes wanting a 40% on color/chem services its a bonus for you as you get the total cost of the color to write-off inc. vat.She will file her personal costs for supplies used that she purchases not supplied by you herself.

If shes registered as a business & files her own vat, needs receipts for her product costs,color included as purchased from you(difficult to total properly in this situation) then pay would be based on tax/vat inc. amount.
Hope this helps.....I'm in Canada though but it seems a similar situation!

Vat and tax are two separate things x

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