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The Pros & Cons of UK VAT registration
Thread poster: Dan Lucas
Charlie Bavington
Charlie Bavington  Identity Verified
Local time: 22:12
French to English
Confirmation Jul 1, 2015

Just to back up what you've already been told, mostly.


1) Is there any way for this agency to get round this legally and ethically?

You can, apparently, get a VAT number more or less specifically for this situation. No personal experience. I'm VAT registered in the "conventional" way, as it were.

2) As a UK firm, how burdensome is being VAT registered?

Depends how you define burdensome Takes me about 15-30 minutes every quarter, including the European Sales List. But my software spews out the figures for me, all I have to do is check them & type them on the hmrc website (and in truth, some s/ware will upload it for you too).
Do not overlook the ESL in your VAT admin if you have EU clients.

3) Would I have to charge VAT to all UK customers?

You now seem fully informed on this point

4) Would I have to charge VAT to all non-UK customers?

You seem reasonably clear on this too by now, but I'll state it the way I always understood it. HMRC's intro to VAT (notice 700) states that "supplies are outside the scope of VAT if they are.... made outside the UK". So far, so good, but I am in fact in the UK - so do I make my supply here?

Notice 741b section 8.1.3 tells us that translation is a service that is not supplied where it is performed. That being so, the "place of supply" is "where the customer belongs", so if the customer is outside the UK, notice 700 applies and translation is outside the scope of VAT. QED.

5) Are there any other benefits? I suppose I can claim VAT back on corporate purchases,
Yup. To me, a major benefit, apart from getting a few quid back over the course of the year, is avoiding the issue you started the thread with. Although there are other ways of achieving this, it seems.


Are there any major disadvantages?

I would say not. But then I do a great deal of my own number crunching. Just as well, as my accountant has proved to be somewhat less than efficient. I had to tell THEM about the Employment Allowance and the impact on the optimum director's salary. So I'm now running the payroll side myself and am gradually looking to take over the whole shooting match (filing and whatnot). I digress. Point is I'm very happy playing with figures anyway, so it's no issue to me, and if you are similar, then you might find the same.
If you let an accountant do it all for you I would assume they will charge more.

[Edited at 2015-07-01 12:04 GMT]


 
Michael Beijer
Michael Beijer  Identity Verified
United Kingdom
Local time: 22:12
Member (2009)
Dutch to English
+ ...
Thanks for the info Charlie Jul 1, 2015

Charlie Bavington wrote:
[…]
4) Would I have to charge VAT to all non-UK customers?

You seem reasonably clear on this too by now, but I'll state it the way I always understood it. HMRC's intro to VAT (notice 700) states that "supplies are outside the scope of VAT if they are.... made outside the UK". So far, so good, but I am in fact in the UK - so do I make my supply here?

Notice 741b section 8.1.3 tells us that translation is a service that is not supplied where it is performed. That being so, the "place of supply" is "where the customer belongs", so if the customer is outside the UK, notice 700 applies and translation is outside the scope of VAT. QED.
[…]


Just had a look myself, and the following Notice on the gov.uk website makes it very clear:

"8.1.2 Examples of services supplied ‘where performed’
If you supply these services you should look carefully to see if your supplies are subject to the new B2B general rule, unless your supplies are of admissions services or services related to admissions in which case this section applies. If you make B2C supplies of these services table 3 in paragraph 8.1.1 shows whether your supplies will be affected by the changes effective from 1 January 2010 and 1 January 2011.

[…]

• services of an oral interpreter at an event, such as a meeting. For other forms of translation services, see paragraph 8.1.3

8.1.3 Examples of services that are not supplied ‘where performed’

[…]

• written translation services or interpreters’ services which do not take place at an event. These are consultancy services

[…]

15.5.2 What are services of consultants and consultancy bureaux?
Services of consultants and consultancy bureaux cover the normal services of experts in all professional areas who act in an accepted professional or advisory capacity. Examples include:

• research and development
• market research
• written translation services or interpreters’ services which do not take place at an event, such as interpreting services for a telephone conference - see section 8 for oral interpreting at an event"

("VAT Notice 741A: place of supply of services": https://www.gov.uk/government/publications/vat-notice-741a-place-of-supply-of-services/vat-notice-741a-place-of-supply-of-services )

Michael


 
Dan Lucas
Dan Lucas  Identity Verified
United Kingdom
Local time: 22:12
Member (2014)
Japanese to English
TOPIC STARTER
In summary: I have applied to register Jul 1, 2015

Dan Lucas wrote:
Just a quick thanks to Angela, Thomas, Sheila, markusob and both Michaels for their responses. Much to digest there, so still mulling over my responses. Hoping for a view from my tax accountant soon.

In addition to those mentioned above, thanks are due to Charlie for his interesting contribution. Fortunately my accountant - unlike Charlie's - is very good and responsive and she agreed with the majority in this thread: register. However, she suggested that standard VAT accounting would offer more flexibility than the FRS.

Most commenters recommended that I register. In splendid isolation, Michael B suggested I duck and dive, and generally try to persuade the client that a VAT number just isn't necessary - which indeed it may not be, in practice at least.

After all, some of my European clients have somehow got along without my giving them a VAT number. I have a lot of sympathy for his argument, because that's the approach that I myself have taken until now. Until now, it has worked.

However, this client would have been the second in a month to refuse point-blank to do business without a VAT number. If I want to do more business in Europe without spending time in (ultimately fruitless) email exchanges with potential clients, the writing is on the wall: register for VAT.

So that, gentle readers, is what I have done. I registered today and hope to get my number soon.

A big thanks to everybody who commented on the thread for their cogent and useful opinions.

Regards
Dan


 
Dan Lucas
Dan Lucas  Identity Verified
United Kingdom
Local time: 22:12
Member (2014)
Japanese to English
TOPIC STARTER
Done and dusted Jul 7, 2015

Dan Lucas wrote:
I registered today and hope to get my number soon.

A quick update: I received my VAT number two days after completing the registration procedure. Not bad!

Dan


 
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The Pros & Cons of UK VAT registration






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