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Tax issue in UK
Thread poster: llian
English to Chinese
Oct 20, 2005

Hi,I am working as a freelancer in UK.I have got an assignement and the client needs my invoice.Do I need to add VAT in my invoice? Do I need to pay tax to local tax bureau? How am I going to do that?
Any help would be highly appreciated!

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Anna Smedgård
Local time: 16:27
English to Swedish
+ ...
VAT in the UK Oct 20, 2005

Hi Lillian,

You only ever add UK VAT to an invoice if you are registered for VAT. If you have not registered for VAT with HMRC then you do NOT add VAT.

If you however have registered for VAT, then you MUST add VAT to all UK sales, you can do zero rated within the EU if you have the customers VAT no (if no VAT no available then you have to add UK VAT), and sales to the rest of the world are VAT exempt.

VAT registration is mandatory if you turn over a certain amount per year. This is currently around £60k. will give you all the info you need. You can register voluntarily if you want to.

With regard to paying tax. If you are self employed the you need to advice the tax office, yes. What was formerly the inland revenue has recently merged with HM Customs and Excise to form the HMRC, so info on the same site as above.

As self employed sole trader you will need to account for tax on your annual tax return, and pay it as directed by HMCE. You will also need to do a tax return if you are a company director, say if you do your translation work through a limited company, as I do. An accontant can advice you on which way is suitable for you to trade.

If you need information on starting a business in general then I can recommend the community at, which is really helpful. It is not a tranlator site per se, but you can get all sorts of other help with business issues.

Best of luck, Anna

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English to Chinese
Thanks Anna Oct 20, 2005

Thanks,Anna.It is very helpful.

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Ruth Martinez  Identity Verified
Member (2004)
English to Spanish
+ ...
UK VAT threshold: £65,000 Oct 20, 2005

Hi Lillian:

You do not need to charge VAT if you're not registered for VAT, and I assume you're not.

The VAT threshold in the UK is around £65,000 per annum. Therefore, if you're not above that threshold you can choose whether to register or not. Please note there's nothing wrong with not being registered if you're earning less than £65,000 per year.

The following links might help you:



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Claudio Chagas
Local time: 12:27
English to Portuguese
+ ...
VAT Advice (UK) Oct 20, 2005

Hi Lillian,

I carry out editing and translation work for UK agencies, and had the same questions concerning VAT registration as you. So I wrote to the HMRC and they were very helpful.

Here is a copy of one e-mail I received, which I think was very clear on this issue.

Please note that I cannot advise an individual business on whether or not it would be advantageous for them to register for VAT I can only provide guidance on the registration requirements and procedures. I will address each of your points in turn.

1. It is up to the individual to decide whether his business should be a limited company or sole trader etc. HM Revenue & Customs cannot advise you on this. You should seek further advice from a tax specialist or equivalent.

2. You are correct in thinking that you do not have to register for VAT. Registration can be voluntary or compulsory. However if you make taxable supplies in the UK of over �60,000 during any 12 month period VAT registration does becomes compulsory. The 12 month period is a rolling 12 month period. You should look at the previous 12 months sales at the end of every month and if the total value of taxable supplies has reached the current registration threshold of �60,000 the business is required to become VAT registered. A business can also register on a voluntary basis, there is no minimum threshold.

3. If you register for VAT you must charge VAT on your taxable supplies at the applicable rate.

4. If registered you may claim as input tax the VAT on purchases you make for your company subject to the conditions. You may not reclaim any VAT on purchases you make that relates to any non business or exempt supplies that you make.

5. You may do your own accounts or you may wish to employ a tax specialist or representative in the UK to do this for you. It is up to the individual to make this decision, however, please note that you are required to keep certain records and accounts by law.

I would also like to mention that the service you carry out may be considered as 'outside the scope' of UK VAT. You have stated that you perform a translation service, if the translation is 'oral' the service is considered for VAT purposes as being carried out where performed i.e. the actual place you were in at the time you performed the oral translation. Basically this could mean you may be liable to register for VAT in that particular country if it is within the EU. If the country is not within the EU and you perform an oral translation you service may be considered 'outside the scope' and there will be no requirement to register.

If the service is one of written translation and performed for the UK agency your service may also be considered 'outside the scope' and there will be no requirement to register. Information of place of supply of services can be found in Public Notice 741.

Further information on VAT can be found in Public Notice 700 'The VAT Guide' and more detailed information on registration is available in Public Notice 700/1 'Should I be registered for VAT?'

You may wish to apply to register for VAT on a VOLUNTARY basis when: The value of your taxable supplies is below the registration threshold. If the value of your taxable supplies is below the threshold, and you want to register for VAT on a voluntary basis, as you feel that this will benefit your business, you should read the publication below and complete the application form.

VAT Notice 700/1 - Should I be registered for VAT?
Form VAT 1 - Application for VAT Registration (December 2001)

The above-mentioned notices are available to view at our Internet site, the address is provided at the bottom of the e-mail. If you do not have access to the Internet, you may request copies from the Contact Centre.

[Edited at 2005-10-21 09:11]

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