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Problems when starting to charge VAT?
Thread poster: Nicole Y. Adams, M.A.

Nicole Y. Adams, M.A.  Identity Verified
Australia
Local time: 04:36
Member (2006)
German to English
+ ...
Apr 10, 2006

Hello,

I apologize if this has been asked before but I was wondering which problems, if any, you might have encountered when first registering for VAT and adding VAT to your charges.

I am currently not VAT registered, as my income is below a certain level, but I am sure I will cross that bridge in the future.

Did you just keep your usual rates and inform your regular clients that from now on they will have to pay VAT on top of that? Did they make a fuzz or did they just pay without problems? Or did they even ask you to lower your rates to 'make up' for it, or did you even loose regular clients over this?

Thanks,

Nicole


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Niina Lahokoski  Identity Verified
Finland
Local time: 20:36
Member (2008)
English to Finnish
+ ...
No problems Apr 10, 2006

Hi, I registered this year and have had no problems. I let all my clients know about the VAT registration beforehand and said that all rates are VAT exclusive. No agency has asked me to lower my rates.

I think most agencies are VAT registered, so your registering won't affect them, unless they are in the same country. At least so it is in Finland - I charge VAT to Finnish clients but not the clients from other EU countries.


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Valentinas & Halina Kulinic  Identity Verified
Local time: 20:36
English to Ukrainian
+ ...
Discuss... Apr 10, 2006

Dear Nicole,

First of all you should not charge any VAT to your EU clients (Directive 77/388/EEC, 9(2)(e)). With all the non-EU clients... I believe you should discuss this matter with each of them, but make them prepared in advance.

Good luck
Valentinas


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Clare Barnes  Identity Verified
Sweden
Local time: 19:36
Swedish to English
+ ...
Shouldn't make any difference Apr 10, 2006

As you are in the UK you should charge VAT to your UK customers (though not, as has been pointed out, to others in the EU). VAT is not an additional expense for your customers, provided they can claim it back, nor is it an income for you as you are just looking after the money before handing it over to the HMRC - therefore you should not change your rates (unless you want to ask for more, that is!).

There have been lots of discussions about VAT here - try doing a forum search.


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Angela Dickson  Identity Verified
United Kingdom
Local time: 18:36
French to English
+ ...
Only one small potential problem Apr 10, 2006

I can only think of one problem - very small outsourcers might be put off outsourcing to you. I occasionally outsource work, and tend to avoid subcontracting to those who are VAT-registered as it simply costs me more (I am not registered - yet).

It's highly likely that your clients are rather bigger than that, though - so I can't see that this problem will affect you much.


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Lagom  Identity Verified
United Kingdom
Local time: 18:36
Swedish to English
Not a problem! Apr 10, 2006

You should only have to charge VAT to your UK based clients not those based in the EU or elsewhere. I have found that it makes absolutely no difference to my clients or potential clients and the financial benefits of taking advantage of the various schemes available are pretty good!

This is a very interesting article for anyone interested in the exciting subject of VAT!

http://www.translatorscafe.com/cafe/article24.htm

Ben


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Williamson  Identity Verified
United Kingdom
Local time: 18:36
Flemish to English
+ ...
Treshold Apr 11, 2006

Only if you reach the £61.000 p.a. U.K. treshold. Otherwise you can opt out/in of VAT.

[Edited at 2006-04-19 12:13]


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Niina Lahokoski  Identity Verified
Finland
Local time: 20:36
Member (2008)
English to Finnish
+ ...
VAT threshold Apr 12, 2006

I wonder... why are the thresholds so different in different countries? In Finland you have to register when your income is more than 8.500 euros per year, and e.g. in the UK and Germany the threshold seems to be much higher.

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Ralf Lemster  Identity Verified
Germany
Local time: 19:36
English to German
+ ...
National tax laws Apr 13, 2006

Hi Niina,
Simple answer...

I wonder... why are the thresholds so different in different countries?

...although there is some harmonisation in VAT systems across the EU, each country sets its tax rules.

Best regards,
Ralf


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juvera  Identity Verified
Local time: 18:36
Member (2005)
English to Hungarian
+ ...
Why worry now? Apr 14, 2006

Nicole Y. Adams, M.A. wrote:

I am currently not VAT registered, as my income is below a certain level, but I am sure I will cross that bridge in the future.

Nicole


In the UK the VAT threshold is £61 000.00 a year from this month.

If you work six days a week, without a holiday, you would have to average over £200/day to get to that figure.
If you only work five days a week, that would rise to approx. £235/day.

Do you really have to worry about it? I am not saying that you can't reach this figure, but to be able to maintain it week after week, month after month is a different ball game.

Not only because it is quite a feat, but how can you ensure such a steady flow of work coming in all the time at the right moment?

Also, the threshold tends to be increased every year. Therefore you are chasing a moving target.

Of course, there is nothing to stop you to register anyway, just that if it worries you, then think about it rationally and cross the bridge when you really have to.


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Williamson  Identity Verified
United Kingdom
Local time: 18:36
Flemish to English
+ ...
Stimulate the economy Apr 19, 2006

The answer to your question is : to stimulate the economy and self-employment and to have less (skilled) people on the dole. The less administration and taxes, the more people are inclined to take the risk to become self-employed.

In some countries becoming a self-employed translator is a ticket to bankruptcy or ending up working to advance money to a bankrupt state.

[Edited at 2006-04-19 12:12]


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Nicole Y. Adams, M.A.  Identity Verified
Australia
Local time: 04:36
Member (2006)
German to English
+ ...
TOPIC STARTER
Thanks! Apr 22, 2006

Thank you for all your replies. Seems like opting in voluntarily in the UK is not worth it for me at the moment.

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