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UK VAT after Brexit
Thread poster: Will Kelly

Will Kelly
Verenigde Koninkryk
uit Nederlands in Engels
Aug 10, 2019

Hi all. I'm a UK-based translator supplying B2B (agencies, other direct clients) and B2C customers in the Netherlands. My current understanding is that, as a VAT-registered limited, I need to charge VAT at 20% for B2C and at 0% for B2B.

Brexit is looming, and we still don't know whether or not there will be a deal and how a deal or no-deal scenario will affect things, but it might be useful for us UK-based translators supplying EU countries to pool our thoughts.

The UK
... See more
Hi all. I'm a UK-based translator supplying B2B (agencies, other direct clients) and B2C customers in the Netherlands. My current understanding is that, as a VAT-registered limited, I need to charge VAT at 20% for B2C and at 0% for B2B.

Brexit is looming, and we still don't know whether or not there will be a deal and how a deal or no-deal scenario will affect things, but it might be useful for us UK-based translators supplying EU countries to pool our thoughts.

The UK government's guidance on VAT in a no-deal scenario is here: https://www.gov.uk/government/publications/vat-for-businesses-if-theres-no-brexit-deal/vat-for-businesses-if-theres-no-brexit-deal.
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Dan Lucas
Andrew Hodges
 

liz askew  Identity Verified
Verenigde Koninkryk
Local time: 17:36
Member (2007)
uit Frans in Engels
+ ...
VAT Aug 13, 2019

Hi,
I see from various sites that your earnings need to be over £85,000 before registering for VAT.
You must have a very healthy income, I thought my income was high at over £34,000 but at least I don't need to be VAT registered.
Best of luck!
Liz Askew


Tom in London
 

Dan Lucas  Identity Verified
Verenigde Koninkryk
Local time: 17:36
Member (2014)
uit Japannees in Engels
There are benefits to VAT registration Aug 13, 2019

liz askew wrote:
I see from various sites that your earnings need to be over £85,000 before registering for VAT.

Liz, you are obliged to register above a certain level of sales, but you can register voluntarily below that level as well.

I registered for a VAT number - at a level far below £85k - because I had EU clients asking me about VAT numbers, and it looked like an easy way to shortcut the "You need a VAT number" / "No I don't" back-and-forth that seems to take place. (VAT numbers are the subject of dozens, if not hundreds of threads on the ProZ forums.)

The other thing is that you can claim VAT back on all purchases. That means a 20% reduction in costs for things like stationery and postage, as well as big-ticket items such as computers, peripherals, laser printers and consumables.

I already record keep track of my accounts, so I spend no more than about 10 minutes every quarter preparing and submitting a VAT report. I consider it time well spent.

Regards,
Dan


Daryo
Mirelluk
Christine Andersen
 

Will Kelly
Verenigde Koninkryk
uit Nederlands in Engels
TOPIC STARTER
Not compulsory Aug 13, 2019

Registration below the threshold isn't compulsory, but you can register voluntarily.

 

Dan Lucas  Identity Verified
Verenigde Koninkryk
Local time: 17:36
Member (2014)
uit Japannees in Engels
EORI Aug 14, 2019

Will Kelly wrote:
The UK government's guidance on VAT in a no-deal scenario is here:

I was initially unsure whether I needed to register for an EORI number, but it seems that this is required only for physical goods, not services.

Dan


 

Dan Lucas  Identity Verified
Verenigde Koninkryk
Local time: 17:36
Member (2014)
uit Japannees in Engels
Not asked for, but given Aug 29, 2019

Dan Lucas wrote:
I was initially unsure whether I needed to register for an EORI number, but it seems that this is required only for physical goods, not services.

Well, I have received an EORI number in the post anyway, for what it's worth.

Dan


 

Christine Andersen  Identity Verified
Denemarke
Local time: 18:36
Member (2003)
uit Deens in Engels
+ ...
Being VAT registered makes life a lot easier for others Aug 29, 2019

Dan Lucas wrote:
...
I registered for a VAT number - at a level far below £85k - because I had EU clients asking me about VAT numbers, and it looked like an easy way to shortcut the "You need a VAT number" / "No I don't" back-and-forth that seems to take place. (VAT numbers are the subject of dozens, if not hundreds of threads on the ProZ forums.)
...


You do a lot of people a great favour, I am sure! In most EU countries the threshold for VAT registration is, as you say, much lower than in the UK. Here in Denmark the system is quite simple for very small companies, but a VAT number is the only thing that goes automatically through without extra hassle.

At the moment the banks and others are very officious about money laundering, and before that the excuse was terrorism! They check everything that falls outside the regular routines. However, if you look like a straightforward, legitimate business, they do not have time to turn every transaction inside out, and you can slip through…

Why HMRC could not come up with a simple answer beats me, but I keep a low profile and stay on the straight and narrow with the Danish authorities too!

What precisely will happen after Brexit remains to be seen, but I don't have to bother about VAT with Norwegian clients, who are in the Nordic union like Denmark, but not the EU.


 

Tim Branton
Verenigde Koninkryk
Local time: 17:36
Member (1970)
Flat Rate VAT Scheme Oct 3, 2019

Dan Lucas wrote:

liz askew wrote:
I see from various sites that your earnings need to be over £85,000 before registering for VAT.

Liz, you are obliged to register above a certain level of sales, but you can register voluntarily below that level as well.

I registered for a VAT number - at a level far below £85k - because I had EU clients asking me about VAT numbers, and it looked like an easy way to shortcut the "You need a VAT number" / "No I don't" back-and-forth that seems to take place. (VAT numbers are the subject of dozens, if not hundreds of threads on the ProZ forums.)

The other thing is that you can claim VAT back on all purchases. That means a 20% reduction in costs for things like stationery and postage, as well as big-ticket items such as computers, peripherals, laser printers and consumables.

I already record keep track of my accounts, so I spend no more than about 10 minutes every quarter preparing and submitting a VAT report. I consider it time well spent.

Regards,
Dan

It's also worth considering the Flat Rate VAT scheme. You pay a fixed rate to HMRC (I think 12%) while charging your customers 20% - so could be a nice option if your VAT-able expenses are very low. Here's a link which explains more:

https://www.gov.uk/vat-flat-rate-scheme


 

Will Kelly
Verenigde Koninkryk
uit Nederlands in Engels
TOPIC STARTER
Depends on extent of B2C Oct 3, 2019

Tim Branton wrote:
It's also worth considering the Flat Rate VAT scheme. You pay a fixed rate to HMRC (I think 12%) while charging your customers 20% - so could be a nice option if your VAT-able expenses are very low. Here's a link which explains more:

https://www.gov.uk/vat-flat-rate-scheme


It would only be worth considering that if you have a lot of end customers, because VAT on services supplied B2B to another EU country is at 0%. B2C is the usual 20%.


 

Andrew Hodges
Verenigde Koninkryk
Local time: 17:36
uit Kroaties in Engels
+ ...
UK VAT after Brexit Jan 15, 2020

Hi everyone,

I also opted for voluntary VAT registration as several clients across Europe needed a VAT number.
As I understand it, for translation, you charge 20% for B2C across Europe (place of supply defined as UK) and nothing for B2B as they add VAT via the reverse charge mechanism. You have to submit an EC sales list.

After the Brexit transition period, there will be no need to submit an EC sales list. Apart from that, nothing is clear. Perhaps the UK govt wil
... See more
Hi everyone,

I also opted for voluntary VAT registration as several clients across Europe needed a VAT number.
As I understand it, for translation, you charge 20% for B2C across Europe (place of supply defined as UK) and nothing for B2B as they add VAT via the reverse charge mechanism. You have to submit an EC sales list.

After the Brexit transition period, there will be no need to submit an EC sales list. Apart from that, nothing is clear. Perhaps the UK govt will do something with VAT, there are discussions of switching to a US style sales tax. Leaving the EU and not reforming VAT is an opportunity missed in my view. I expect (unless there is a tax on services which seems a remote possibility) that we will continue charging VAT for B2C and not charging for B2B.
Crucially, clients in Europe will no longer need our VAT number so I plan on deregistering then.

Will Kelly wrote:

Hi all. I'm a UK-based translator supplying B2B (agencies, other direct clients) and B2C customers in the Netherlands. My current understanding is that, as a VAT-registered limited, I need to charge VAT at 20% for B2C and at 0% for B2B.

Brexit is looming, and we still don't know whether or not there will be a deal and how a deal or no-deal scenario will affect things, but it might be useful for us UK-based translators supplying EU countries to pool our thoughts.

The UK government's guidance on VAT in a no-deal scenario is here: https://www.gov.uk/government/publications/vat-for-businesses-if-theres-no-brexit-deal/vat-for-businesses-if-theres-no-brexit-deal.
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Will Kelly
Verenigde Koninkryk
uit Nederlands in Engels
TOPIC STARTER
If we leave without a trade deal... Jan 15, 2020

If we leave without a trade deal at the end of the transition period, then VAT will have to be charged for BTB as well. That might not seem like a probable outcome, but remember that Boris and the ERG are now in charge. Perhaps the unrealistic timetable for securing and finalising a trade deal is designed to fail and simultaneously allow for scapegoating. Note also that, even if we leave with a deal, exported services are likely to have inferior status to exported goods, despite the UK being a l... See more
If we leave without a trade deal at the end of the transition period, then VAT will have to be charged for BTB as well. That might not seem like a probable outcome, but remember that Boris and the ERG are now in charge. Perhaps the unrealistic timetable for securing and finalising a trade deal is designed to fail and simultaneously allow for scapegoating. Note also that, even if we leave with a deal, exported services are likely to have inferior status to exported goods, despite the UK being a largely service-based economy. Tariffs are a possibility. As someone who follows the forex markets closely, I suspect the markets' current sanguine mood about Brexit progress will be short-lived as negotiations proceed post-31 January and it becomes clear that Johnson's strategy will again be a game of chicken, which necessarily entails decisions being made last-minute. The uncertainty isn't over.Collapse


Helen Shiner
Christine Andersen
 

Dan Lucas  Identity Verified
Verenigde Koninkryk
Local time: 17:36
Member (2014)
uit Japannees in Engels
Staying with it Jan 16, 2020

Andrew Hodges wrote:
Crucially, clients in Europe will no longer need our VAT number so I plan on deregistering then.

I have no plans to deregister. It takes me about 15 minutes to complete a quarterly VAT return, and most of that is navigating the UK's government payment site. Then it's just a matter of copying and pasting half a dozen figures from my accounting software into the online form provided by the government. For me it's probably an investment of one (1) hour a year in terms of admin. The opportunity cost is therefore maybe £50 or a bit more.

Every year I claim back far more than that in VAT refunds on purchases of goods and services, such as my accountant, toner for the laser printer, business cards and stationery, various items of equipment, and - once every few years - a much larger purchase like a PC, chair, desk or printer.

I'll have to assess whether the VAT regime is going to get more or less burdensome going forward, but for now it seems worth my while to remain VAT-registered. And of course if you are just above or just below the threshold it makes sense to stay registered for the sake of continuity.

Regards,
Dan


 

Dan Lucas  Identity Verified
Verenigde Koninkryk
Local time: 17:36
Member (2014)
uit Japannees in Engels
Charging VAT outside the EU? Jan 16, 2020

Will Kelly wrote:
If we leave without a trade deal at the end of the transition period, then VAT will have to be charged for BTB as well.

Will, what's your reasoning here? If the UK leaves without a trade deal it becomes part of a category that includes the US and many other countries. Freelancers in those countries do not charge VAT on translation services sold to customers in the EU. Or have I misunderstood you?

Regards,
Dan


 

Will Kelly
Verenigde Koninkryk
uit Nederlands in Engels
TOPIC STARTER
I stand corrected Jan 16, 2020

I may have been too hasty. Here’s the Government’s own guidance:

https://www.gov.uk/government/publications/vat-for-businesses-if-theres-no-brexit-deal/vat-for-businesses-if-theres-no-brexit-deal

‘If the UK leaves the EU without a deal, the government’s aim will be to keep V
... See more
I may have been too hasty. Here’s the Government’s own guidance:

https://www.gov.uk/government/publications/vat-for-businesses-if-theres-no-brexit-deal/vat-for-businesses-if-theres-no-brexit-deal

‘If the UK leaves the EU without a deal, the government’s aim will be to keep VAT procedures as close as possible to what they are now. […] However, if the UK leaves the EU with no agreement, then there will be some specific changes to the VAT rules and procedures that apply to transactions between the UK and EU member states. […] The rules around ‘place of supply’ will continue to apply in broadly the same way that they do now, areas of potential change are flagged below. […] For UK businesses supplying digital services to non-business customers in the EU the ‘place of supply’ will continue to be where the customer resides. VAT on services will be due in the EU member state within which your customer is a resident.’

BTB isn’t mentioned in the guidance. Hopefully this means there will be no change. That said, translation is already something of an anomaly, as many services are deemed to be rendered where the customer is located.
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Tom in London
Verenigde Koninkryk
Local time: 17:36
Member (2008)
uit Italiaans in Engels
no VAT Jan 16, 2020

Dan Lucas wrote:

(...) The opportunity cost is therefore maybe £50 or a bit more.

Every year I claim back far more than that in VAT refunds on purchases of goods and services, such as my accountant, toner for the laser printer, business cards and stationery, various items of equipment, and - once every few years - a much larger purchase like a PC, chair, desk or printer.



As a non-VAT registered UK-based translator I just can't see the point of registering for VAT.

I don't pay an accountant (I do my own accounts)
I buy about 1 toner cartridge every 18 months (I don't print much)
I don't print business cards or stationery
I buy a computer abou every 5 years or longer. The same goes for chairs, etc.

So my VAT-rated expenses are absolutely minimal.

As for Brexit: my biggest worry is what's going to happen to the international bank-to-bank payments system.

[Edited at 2020-01-16 15:09 GMT]


Jennifer Taylor
Angus Stewart
 
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