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Do I need a VAT number to invoice EU clients from the UK?
Persoa que publicou o fío: Diana Edmond

Nikki Graham  Identity Verified
United Kingdom
Local time: 12:31
Membro (2003)
Spanish to English
Spain Jul 2, 2013

Tom is right. A lot of Spanish accountants just don't know enough about EU law or want to go there (they prefer to keep their life simple) and so have told our clients that they cannot work with translators from the UK without a VAT number. This is nonsense, as I'm not registered for VAT and I've been working for a variety of Spanish clients for years. As far as I can gather, this problem was fuelled by complications with the Spanish online declaration system, since it just would not compute dat... See more
Tom is right. A lot of Spanish accountants just don't know enough about EU law or want to go there (they prefer to keep their life simple) and so have told our clients that they cannot work with translators from the UK without a VAT number. This is nonsense, as I'm not registered for VAT and I've been working for a variety of Spanish clients for years. As far as I can gather, this problem was fuelled by complications with the Spanish online declaration system, since it just would not compute data without a VAT number. Whether they have changed the online system or my clients have found a way round it, I do not know, but I'm finding that clients in Spain seem to be more willing to work with UK-based translators now.Collapse


Tom in London
 

Jessie Linardi  Identity Verified
United Kingdom
Local time: 12:31
Spanish to English
+ ...
Seems about right Oct 2, 2013

Nikki Graham wrote:
As far as I can gather, this problem was fuelled by complications with the Spanish online declaration system, since it just would not compute data without a VAT number.

This wouldn't surprise me at all. I cannot count the number of times Spanish online forms have failed to process because my information does not conform to the Spanish standard. (What do you mean your postcode has letters in it? What do you mean you don't want to supply your DNI/passport number when registering for some silly online account?)


 

Steafan34  Identity Verified
United Kingdom
Local time: 12:31
Membro (2011)
Japanese to English
+ ...
Certificate of fiscal residence Sep 30, 2015

As I wasn't VAT registered in the UK, one translations agency in Spain had me send them a certificate of fiscal residence. HMRC duly obliged when asked.

 

Anna Hjalmarsson  Identity Verified
United Kingdom
Local time: 12:31
English to Swedish
+ ...
VAT number mandatory for VIES (when working for EU institutions) Aug 12, 2016

Hello everyone,

I am struggling to get correct information as to whether I have to add VAT to my invoices or not (for clients in other EU countries). I am based in the UK and will never attain the VAT threshold, but according to my client "the Vies system is not a “formality” it is imposed by new EU legislation common to all EU countries. According to this legislation, starting on January 1st 2010 it is illegal to pay invoices which do not have a Vat number validated through the
... See more
Hello everyone,

I am struggling to get correct information as to whether I have to add VAT to my invoices or not (for clients in other EU countries). I am based in the UK and will never attain the VAT threshold, but according to my client "the Vies system is not a “formality” it is imposed by new EU legislation common to all EU countries. According to this legislation, starting on January 1st 2010 it is illegal to pay invoices which do not have a Vat number validated through the vies." I now have a VAT number and am registered in VIES.

I have been in touch with HMRC regarding this, but they've been unable to give me a clear answer in this particular case. Would be grateful to know how other UK based translators working for EU institutions do! Many thanks!
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Giulia Faraguna  Identity Verified
Germany
Local time: 13:31
English to Spanish
+ ...
The VAT number is compulsory, no matter how hard you avoid it Dec 12, 2016

As long as the UK is in the EU (until May 2017 or so) any translator in the UK has to had a VIES number, you just have to go to the Tax Office and ask for it.
There is no mayor problem. This number is valid for invoices in the EU. I invoice all the time to Spain and Italy, everyone has one. The Uk members have to inform themselves better.


 

Michael Beijer  Identity Verified
United Kingdom
Local time: 12:31
Membro (2009)
Dutch to English
+ ...
hmm Dec 12, 2016

Giulia Faraguna wrote:

As long as the UK is in the EU (until May 2017 or so) any translator in the UK has to had a VIES number, you just have to go to the Tax Office and ask for it.
There is no mayor problem. This number is valid for invoices in the EU. I invoice all the time to Spain and Italy, everyone has one. The Uk members have to inform themselves better.


I have been working in the UK now for over 7 years, and I am not VAT registered, and as far as I know, am not required to get a VAT number. I have asked my tax accountant, and all manner of other people, and all of them said the same thing: it's not mandatory.

I state the following on all my invoices:

Not liable for VAT: see ‘VAT Notice 741A: place of supply of services’*

(*links to: https://www.gov.uk/government/publications/vat-notice-741a-place-of-supply-of-services/vat-notice-741a-place-of-supply-of-services )

I work for a HUGE list of clients, almost all of them in Europe, and have never had a problem.

Michael

PS: Like Steven, one client, once, asked me to provide them with a "certificate of fiscal residence". I did so, but never worked for them again, as it was way too much trouble (an hour on the phone to HMRC, and then waiting for it to arrive and scanning it, etc.).

[Edited at 2016-12-12 15:31 GMT]

[Edited at 2016-12-12 15:33 GMT]


 

Tom in London
United Kingdom
Local time: 12:31
Membro (2008)
Italian to English
What??!!! Dec 12, 2016

Giulia Faraguna wrote:

As long as the UK is in the EU (until May 2017 or so) any translator in the UK has to had a VIES number, you just have to go to the Tax Office and ask for it.
There is no mayor problem. This number is valid for invoices in the EU. I invoice all the time to Spain and Italy, everyone has one. The Uk members have to inform themselves better.


I have no idea what a VIES number is. I don't need one. I have been invoicing Italian clients, and getting paid, for many, many years. I have no idea where my Tax Office is. Never been there.

[Edited at 2016-12-12 16:43 GMT]


 

Diana Edmond
United Kingdom
Local time: 12:31
Membro (2008)
Italian to Romanian
+ ...
INICIO DE TEMA
No VAT, thank you! Dec 12, 2016

Giulia Faraguna wrote:

As long as the UK is in the EU (until May 2017 or so) any translator in the UK has to had a VIES number, you just have to go to the Tax Office and ask for it.
There is no mayor problem. This number is valid for invoices in the EU. I invoice all the time to Spain and Italy, everyone has one. The Uk members have to inform themselves better.


Without meaning to be disrespectful to anyone, this forum thread was aimed for freelancers paying tax in the UK and familiar with the tax system here.

I started the discussion on here in 2013 AFTER calling the HMRC and AFTER being told by them that I could not get a VAT number without actually registering for VAT and becoming a VAT payer. I want to keep my accounting as simple as possible and I will never register if I don't have to.

Luckily, the fellow translators who replied were very helpful and I followed their example by writing on my invoices that I was not a VAT payer.

I have sent invoices all over Europe WITHOUT a VAT number and nobody ever complained about this. I only had two clients (one in Italy, the other one in Croatia) who wanted a certificate of residence, and they both mentioned it was for their own administrative purposes.

[The certificate of residence can be easily requested on the HMRC site https://www.gov.uk/government/publications/apply-for-a-certificate-of-residence-in-the-uk, if anyone is interested. They will send it by post within a week.]

However, as things stand, I have no intention of going through this VAT-VIES nightmare again any time soon.

Diana


Verity Hemp
 

Maria S. Loose, LL.M.  Identity Verified
Belgium
Local time: 13:31
German to English
+ ...
recapitulative statement Dec 12, 2016

Under the 6th VAT Directive, economic operators have to fill in a recapitulative statement of all transactions for which VAT is due by the recipient of the service under the reverse charge procedure. So if you are a UK fiscal resident and you invoice a client who is a resident in a different Member State you would have to report this transaction to your UK tax administration to enable it to exchange data with the recipient Member State's tax administration in order to avoid VAT fraud.
... See more
Under the 6th VAT Directive, economic operators have to fill in a recapitulative statement of all transactions for which VAT is due by the recipient of the service under the reverse charge procedure. So if you are a UK fiscal resident and you invoice a client who is a resident in a different Member State you would have to report this transaction to your UK tax administration to enable it to exchange data with the recipient Member State's tax administration in order to avoid VAT fraud.

I am just curious to find out whether you are reporting these transactions to your UK tax administration without indicating a VAT number. I am asking because I am in charge of an EU tendering procedure and I have some candidates without a VAT number. It seems very strange to me that you are unable to obtain a VAT number in the UK. In most EU Member States you can obtain a VAT number in spite of the fact of not being liable to pay VAT. This VAT number is for the above mentioned reporting purposes only.

[Edited at 2016-12-12 19:33 GMT]
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Michael Beijer  Identity Verified
United Kingdom
Local time: 12:31
Membro (2009)
Dutch to English
+ ...
It's not that we can't obtain a VAT No., in spite of not being liable to pay VAT in specific cases.. Dec 12, 2016

Maria S. Loose, LL.M. wrote:

Under the 6th VAT Directive, economic operators have to fill in a recapitulative statement of all transactions for which VAT is due by the recipient of the service under the reverse charge procedure. So if you are a UK fiscal resident and you invoice a client who is a resident in a different Member State you would have to report this transaction to your UK tax administration to enable it to exchange data with the recipient Member State's tax administration in order to avoid VAT fraud.

I am just curious to find out whether you are reporting these transactions to your UK tax administration without indicating a VAT number. I am asking because I am in charge of an EU tendering procedure and I have some candidates without a VAT number. It seems very strange to me that you are unable to obtain a VAT number in the UK. In most EU Member States you can obtain a VAT number in spite of the fact of not being liable to pay VAT. This VAT number is for the above mentioned reporting purposes only.

[Edited at 2016-12-12 19:33 GMT]


Hi Maria,

It's not that we can't obtain a VAT number, and start logging all the info a VAT-registered trader is required to log (we can), it's that we can choose not to, if we earn below the annual threshold, which is around £70,000 per annum. It's way too much hassle, so I choose not to register and get a VAT number. Obviously, I have to pay VAT on business expenses, but this is more than offset by not having to do all the pointless paperwork.

Michael

PS: each tax year, I file a self-assessment form and send it to HMRC, on which I report all my income (most of it from EU companies, and all earned sans VAT number), my business expenses, etc. Each year, HMRC approves it and I pay them my annual taxes due. They have never once said that I am doing anything illegal, and it is patently obvious to them that there are no VAT numbers on any of my invoices. My tax accountant also said I am doing everything by the book. I do keep hearing the odd European saying that this just can't be right, and each time I do briefly wonder: "Am I doing sth wrong?", but then I ask around again and everyone here in the UK says it's totally fine. I even called HMRC once, years ago, and they too said it's fine not to be VAT registered and invoice EU clients, as long as the document states sth to the effect of "Not liable for VAT: see ‘VAT Notice 741A: place of supply of services’" or "VAT-exempt: HMRC Reference Notice 700/1 (Apr 2010)"

[Edited at 2016-12-12 20:16 GMT]

[Edited at 2016-12-12 20:16 GMT]

[Edited at 2016-12-12 20:18 GMT]


Verity Hemp
 

Michael Wetzel  Identity Verified
Germany
Local time: 13:31
German to English
UK definitely an exception. Dec 12, 2016

As those with UK experience have written, they really can't get a VAT number if they are VAT-exempt. I don't know how the UK System is not in violation of the directive, but that is really the way it is. They don't submit a quarterly report about inner-EU transactions. Again, I don't why that was accepted, but it was.

 

Michael Beijer  Identity Verified
United Kingdom
Local time: 12:31
Membro (2009)
Dutch to English
+ ...
UK is pretty great, taxwise, for us translators Dec 12, 2016

Michael Wetzel wrote:

As those with UK experience have written, they really can't get a VAT number if they are VAT-exempt. I don't know how the UK System is not in violation of the directive, but that is really the way it is. They don't submit a quarterly report about inner-EU transactions. Again, I don't why that was accepted, but it was.


Life may not be perfect here in the UK, but ... taxwise, I would much rather be here than in Spain, France, Belgium, Germany, etc. As a self-employed translator here in the UK, I pay much less tax annually, and I have a lot less paperwork to waste my precious time on.

[Edited at 2016-12-12 20:22 GMT]


Tom in London
 

Diana Edmond
United Kingdom
Local time: 12:31
Membro (2008)
Italian to Romanian
+ ...
INICIO DE TEMA
No VAT Dec 12, 2016

Maria S. Loose, LL.M. wrote:

Under the 6th VAT Directive, economic operators have to fill in a recapitulative statement of all transactions for which VAT is due by the recipient of the service under the reverse charge procedure. So if you are a UK fiscal resident and you invoice a client who is a resident in a different Member State you would have to report this transaction to your UK tax administration to enable it to exchange data with the recipient Member State's tax administration in order to avoid VAT fraud.

I am just curious to find out whether you are reporting these transactions to your UK tax administration without indicating a VAT number. I am asking because I am in charge of an EU tendering procedure and I have some candidates without a VAT number. It seems very strange to me that you are unable to obtain a VAT number in the UK. In most EU Member States you can obtain a VAT number in spite of the fact of not being liable to pay VAT. This VAT number is for the above mentioned reporting purposes only.

[Edited at 2016-12-12 19:33 GMT]


Hello Maria,

I know what you mean, and this is why I raised the question when I first moved to the UK. I used to have a number for VIES purposes when working from Romania without actually being registered as a VAT payer. I would write this number only on invoices sent to EU clients and I would fill in an official document with the client's name, their VAT number and the invoiced amount, on a monthly basis.

I haven't done so since registering as a taxpayer in the UK because of the reasons mentioned in this thread.

On the HMRC tax return sheet I write down the whole income paid by my clients. This is, of course, reflected in my bank statements as well, so there can be no fraud involved. I do not mention every single transaction.

I hope this helps.


 

Michael Wetzel  Identity Verified
Germany
Local time: 13:31
German to English
What is unique about the UK VAT-exempt system Dec 13, 2016

There are many countries, like Spain, that either have no provision for VAT-exempt businesses or an extremely low threshold.
There are many countries, like the UK or Germany, that allow businesses to remain VAT-exempt if their annual sales fall below a certain level.

Two things are unique about the UK:
(1) The threshold for the VAT exemption is extremely high (GBP 70,000 or something, right?), so that almost all freelance translators are eligible for it and the vast majo
... See more
There are many countries, like Spain, that either have no provision for VAT-exempt businesses or an extremely low threshold.
There are many countries, like the UK or Germany, that allow businesses to remain VAT-exempt if their annual sales fall below a certain level.

Two things are unique about the UK:
(1) The threshold for the VAT exemption is extremely high (GBP 70,000 or something, right?), so that almost all freelance translators are eligible for it and the vast majority also seem to opt for it.
(2) In the UK, you cannot get a VAT number unless you give up your VAT exemption. This is what is so confusing to everyone else in the EU. Everywhere else, you have to get a VAT number if you want to sell products to businesses in other EU countries. However, getting this VAT number does not require you to give up your VAT exemption.

Everywhere else, we are also required to fill out a form once a month, quarter, or year with a list of all our EU clients' VAT numbers and the value of the services we have delivered to each of them in that period. Six years ago, it was a pain to adjust our accounting systems to efficiently start producing the needed information, now it is a matter of ten minutes (or maybe half an hour, if someone has a dozen or more different EU clients) per reporting period.
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Tom in London
United Kingdom
Local time: 12:31
Membro (2008)
Italian to English
Confusing indeed Dec 13, 2016

The original question was

"Do I need a VAT number to invoice EU clients from the UK?"

And the answer is

"Only if your estimated turnover for the current accounting year is above the VAT threshold, currently £83,000".

The UK government sets a high VAT threshold as a way of simplifying everything. I find it very advantageous and I would suggest that other EU Member States should do the same thing. A few have started to do it but have set the th
... See more
The original question was

"Do I need a VAT number to invoice EU clients from the UK?"

And the answer is

"Only if your estimated turnover for the current accounting year is above the VAT threshold, currently £83,000".

The UK government sets a high VAT threshold as a way of simplifying everything. I find it very advantageous and I would suggest that other EU Member States should do the same thing. A few have started to do it but have set the threshold so low that it is almost pointless.

[Edited at 2016-12-13 09:23 GMT]
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