I am UK VAT registered and my clients are in the UK. I have to charge them VAT right ?

[richardday365]

Hi,

This might interest people who are VAT registered in the UK, and provide Gigs to firms in the UK  

I used to do consultancy for a firm in Japan, I invoiced them without VAT as they are off-shore.  When the VAT inspector came around he tried to get me to pay £5000 and a massive fine to cover the VAT I was "meant" to have charged them.  They argued and argued until I got a very expensive TAX accountant involved and he said "because I was actually in Japan, delivering the work but raising invoices in the UK everything was OK and the VAT people backed off".  That cost me £2000 to sort out. 

Now I am on Fiver I am selling to UK buyers, and working in the UK I would have a really big shlt-show to deal with including a £'000 fine which if I didn't pay I would have to move into a "His Majesties Hotel" for a year or so. 

Has anybody tested the "well I actually work for Fiverr, and they are in Israel line" with the VAT people and got things settled without any unpleasantness, or am I the only freelancer who works outside the IR35 for a living and has a VAT registered company to operate out of?

Please share experiences, I just charge my clients VAT and offer a receipt at the moment so they can claim it back from VAT man.

Regards

Rich

Edited April 14 by richardday365

[smashradio]

On 4/14/2024 at 7:05 AM, richardday365 said:

This might interest people who are VAT registered in the UK, and provide Gigs to firms in the UK  

I used to do consultancy for a firm in Japan, I invoiced them without VAT as they are off-shore.  When the VAT inspector came around he tried to get me to pay £5000 and a massive fine to cover the VAT I was "meant" to have charged them.  They argued and argued until I got a very expensive TAX accountant involved and he said "because I was actually in Japan, delivering the work but raising invoices in the UK everything was OK and the VAT people backed off".  That cost me £2000 to sort out. 

Now I am on Fiver I am selling to UK buyers, and working in the UK I would have a really big shlt-show to deal with including a £'000 fine which if I didn't pay I would have to move into a "His Majesties Hotel" for a year or so. 

Has anybody tested the "well I actually work for Fiverr, and they are in Israel line" with the VAT people and got things settled without any unpleasantness, or am I the only freelancer who works outside the IR35 for a living and has a VAT registered company to operate out of?

Please share experiences, I just charge my clients VAT and offer a receipt at the moment so they can claim it back from VAT man.

I would ask a professional accountant for advice, or reach out to local theft...ehrm...tax agencies for advice. As a general rule, I don't base my potential stays in His Majesties Hotel on online advice - and the post above which is pure GPT drivel illustrates why perfectly. 

Edited April 14 by smashradio

[richardday365]

I had the situation clarified by an accountant.  Whatever it is, and via whatever platform it is the same.

If you are a bona-fide UK VAT registered business.  

On the invoice states: the buyer is in the UK, and I am the seller in the UK .  VAT is due and a VAT invoice needs to be supplied

VAT on the whole amount the buyer was invoiced.

 

If on the invoice the buyer is outside the UK, and I am the seller.  VAT is not due.

So the moral of the story is don't register for VAT, and better off to go and live around Smashradio's house where he lives with his mummy, as the under 16's dont pay tax.

 

 

 

 

 

 

 

[emmaki]

He lives in Spain, and I live in Greece. We are both in the EU, which means that we have to abide by EU VAT laws. I don't know what Spain's are like, but I can tell you that here in Greece, you invoice Fiverr, not your buyer, and because Fiverr is a third-party country, you send your invoice without VAT. You also have to make a note refering to the article and specific provision.

I never freelanced when I was still in the UK so I have no idea what the regs are there, but I will tell you that if you need an invoice for tax reasons - which you do in GR - then you're not invoicing your buyers. You're invoicing Fiverr. And you're probably going to want an invoice that mentions that no VAT was paid due to whatever thingy of post-Brexit law says so just so the books look tidy. You've already found out that tax people enjoy messing around with people. Why encourage them?

Smashradio is quite correct to say that you need(ed) to talk to an accountant. Again, I don't know what UK law requirs, but I do know that most accountants are clueless when it comes to online work. Don't even get me started on the NACE classifications and bewilderment of how exactly I make money online.

It sounds to me like your accountant is the same as mine and needs careful explanation of things to help them to help you. I'll be over at Smashradio's house because his mummy might cook some good food. Hopefully not the rotten fish in a can thing that I can't remember how to spell.

PS under 16s do pay tax in the UK after their personal allowance runs out. It's contract law you're thinking of, and that's U18. Same in the US.

[richardday365]

Emmaki, UK law is this "VAT rules for supplies of digital services to consumers - GOV.UK (www.gov.uk)" and they spell it out pretty clearly.

 

Edited May 29 by richardday365
reduced size, just left the details for other UK users to read