I thought I'd take a moment to explain a non-electrical aspect of being a contractor here: Handling our equivalent of sales tax.
The present system was introduced when the U.K. joined the "Common Market" in 1972, and is called V.A.T. (Value Added Tax). It currently stands at 17.5% on all electrical goods and labor.
When I issue an invoice to a customer, I add 17.5% tax to the total, collect it from the customer, and mark it in my accounts as being payable to Customs & Excise (the govt. dept. which handles VAT).
Whenever I buy supplies, the shop I buy from does the same, so I have to pay them an extra 17.5%. I then mark this tax in my ledger as receivable from Customs & Excise. I can do the same for any other business-related expense (with one or two exceptions), including tools, stationery, business portion of telephone bill, etc.
Every 3 months, I send in a VAT return with payment of the tax owing to C&E. (Or if by chance I've paid out more VAT than I've collected during the period, I reclaim it.)
Crazy system, or what?!
