[Fiverr Needs To Help Us On Tax/VAT]

LISTEN Everyone. I am Associate Certified Chartered Accountant from UK. i have passed two papers about Taxation(UK). my reply is just to clear your concept about VAT Tax on freelancing income.

freelancing income is transfer into your bank account at the end. either you earn from fiverr or at any other website. if your transfer income is more than 85000 Pound. then you must have to pay VAT. the thing is separate which rate is chargeable on your earning.

FOLLOWING steps will be taken your personal Accountant on behalf of you if you are not very much familiar about accounting and Taxation.

1)- The procedure to register for VAT in HMRC. HMRC is regulatory Tax Authority in UK.

2)- Monthly income transaction bookkeeping. this is now a day mostly in Quickbooks and XERO Accounting software. the benefit of this software is it can connected to your bank account which is helpful to record and maintain your bookkeeping and HMRC is recommend Quickbooks and XERO. because both can connected your VAT Account and we can submit VAT return easily.

you can ask any other question. 🙂

Hi @waqarakram007

I’m not offering advice here but from what i’ve read, Fiverr income is classed as “Out of scope” because Fiverr is a business customer outside of the EU.

The current compulsory VAT registration threshold figure is sales in excess of £85000 in any twelve month period.

You disregard sales that are “Out of scope”, therefore Fiverrs “Out of scope” income will not itself trigger compulsory VAT registration.

@waqarakram007 as a Chartered accountant could you explain why this is incorrect? Thanks for any help you can provide.

Sources (another chartered accountant): https://www.vgwoodhouse.co.uk/bookkeeping-and-vat-topics/services-outside-scope-vat.htm

https://www.vgwoodhouse.co.uk/bookkeeping-and-vat-topics/vat-registration.htm

[Fiverr Needs To Help Us On Tax/VAT]

It’s become apparent my past 12 months earnings through Fiverr are over the £85k VAT threshold. Working through an online marketplace seems to be confusing a lot of accountants. Do you have any source to prove this income is “Out of scope”? Do you have a UK accountant that understands this that you could refer me too?

Hi Tom,

I use Crunch accountants, and it was whomever I spoke with there (it’s a team of people so I couldn’t give you a name) who confirmed this work was out of scope. I believe this is because of the geographical location of Fiverr, but also because of the portal method of operating, explained in the link below.

GOV.UK

VAT rules for supplies of digital services to consumers in the EU

Find out about the VAT place of supply rules if your business sells digital services to private consumers in the EU.

Unfortunately, the whole ‘portal’ way of working is still quite new to some accountants, especially the more old-school. Crunch are good as they’re much more up to date with how the world works now, but they’re not the cheapest. Could be worth having a chat with them though.

Fantastic! Thanks for this, i’ll check them out.

Tom

[Fiverr Needs To Help Us On Tax/VAT]

Along with Fiverr being your customer, the income is Out of Scope when it comes to VAT as Fiverr are registered in Tel Aviv.

Hi there @cubittaudio

Are you selling from the UK?

It’s become apparent my past 12 months earnings through Fiverr are over the £85k VAT threshold. Working through an online marketplace seems to be confusing a lot of accountants. Do you have any source to prove this income is “Out of scope”? Do you have a UK accountant that understands this that you could refer me too?

Thanks in advance!

Tom