Invoicing foreign customers from the UK
Thread poster: Cecilia Di Vita

Cecilia Di Vita  Identity Verified
United Kingdom
Local time: 19:05
English to Italian
+ ...
Aug 14, 2009

Hi everyone,

I am currently settling down as a freelance translator here in the UK. I have received my NI number and I'm going to register as a self-employed with HMRC as well as finding a good accountant. In the meanwhile I am working of course and I need to start invoicing my customers, who are NOT in the UK so far.

My question is: what should my invoice be like? what information should it contain? Is there a difference between invoicing customers in the EU and outside? Should I specify the amounts in £ as well, when the rate is in € or USD?

I know that VAT is not invloved as I don't need to register for VAT until my yearly income reaches 61k £.

Any suggestion about that would be appreciated.

Thanks in advance.

Cecilia


 

Jack Doughty  Identity Verified
United Kingdom
Local time: 19:05
Member (2000)
Russian to English
+ ...
deleted Aug 14, 2009

(Having problems trying to download image here)



[Edited at 2009-08-14 11:28 GMT]


 

Celine Gras  Identity Verified

Local time: 20:05
English to French
+ ...
currencies Aug 14, 2009

Hello Cecilia,

As far as currencies are concerned, I guess it is the same as here in France: as you cannot predict what the exchange rate will be like when the money actually reaches your account, you only write the amounts in the currency of your clients. Then, when the money gets to your £ account, the bank will have converted it to £, and this is the amount you will use for accountancy purposes.

When I invoice USD from France, my invoice only contains USD. The bank converts USD to euros, and my accountancy only contains figures in euros.

Is this clear enough?

HTP
Céline


 

Williamson  Identity Verified
United Kingdom
Local time: 19:05
Flemish to English
+ ...
My 2 cents Aug 14, 2009

Only in the currency of the country and it might be a good idea to open a bank-account on the other side of the Channel or a Euro-bank-account at your local bank (if that is possible). The total cost of bank-costs of several invoices can be higher than a Eurostar-ticket London-Lille-London.

 

Gemma Collinge  Identity Verified
United Kingdom
Local time: 19:05
Member (2007)
Japanese to English
+ ...
VAT Aug 14, 2009

Are you going to be VAT registered? If you are, then you have to make sure that the VAT is marked in a sterling equivalent on your invoices.

This was an issue for me as although I was working for a UK client all the rates were in Euros.

HMRC publishes acceptable currency rates for a given month on their website which I've used a lot.


 

Karen Stokes  Identity Verified
United Kingdom
Local time: 19:05
Member (2003)
French to English
Invoice details Aug 14, 2009

Hi Cecilia,

I'm in the same situation as you insofar as I'm based in the UK and invoice clients in the EU. I include the standard information you'd expect - their details, my details, invoice no., invoice date, my job reference, their job reference/purchase order no. and/or job description, word or hourly rate (in euros), job total, invoice total, payment terms and bank details (account name, BIC and IBAN codes). I don't keep a separate euro account, so I enter the invoice in my accounts in GBP based on an estimated exchange rate and then post an adjustment when the invoice is paid.

Hope this helps.

Best,

Karen


 

Peter Linton  Identity Verified
Local time: 19:05
Member (2002)
Swedish to English
+ ...
Euro account Aug 14, 2009

I am UK-based, with EU customers. I have found it worthwhile to open a Euro account at a British bank (in addition to my normal GBP account). This makes it easy for customers to pay me, and I receive the amount invoiced (no exchange rate losses). From time to time I transfer money from the euro account to the GBP account, and get a much better exchange rate than if I exchanged each euro amount separately into GBP.

Another advantage is that if I am going to the eurozone I can withdraw euro cash from my local bank, with no exchange rate loss. A third and minor advantage is that all this is done at the bank's foreign exchange counter, where the queues are very much smaller. However, that indicates a disadvantage of a euro account at this bank -- no online banking, no credit card. But as the bank is so near my home, I do not find that a disadvantage. And these days I prefer to carry cash in the euro zone rather than using a credit card. No risk of fraud, and never been robbed.


 

Cecilia Di Vita  Identity Verified
United Kingdom
Local time: 19:05
English to Italian
+ ...
TOPIC STARTER
Thanks Aug 15, 2009

Thanks everyone (also those who wrote me privately) for your suggestions. In fact I do have an Italian bank account for the transactions in € (with online banking as well) and I'll keep that along with my UK bank account for transactions in £. Furthermore I have a PayPal account where I can receive payments from overseas customers, saving on bank charges. So I guess this solves the problem of the currency.

As far as the invoice itself is concerned, I understand that since I'm not VAT registered I only need to indicate "Not registered for VAT" and that should solve the problem with customers from countries who are not obsessed with this kind of things such as Italy, Spain and Portugal.

Thanks again

Cecilia


 

Russell Jones  Identity Verified
United Kingdom
Local time: 19:05
Italian to English
Paypal Aug 15, 2009

Hi Cecilia

You should be aware that you can only receive so much through Paypal (about £4,400 I believe) before they start asking questions. I think this is under pressure from the tax authorities, to ensure that this payment method is not used to bypass tax liabilities.

Russell


 

Cecilia Di Vita  Identity Verified
United Kingdom
Local time: 19:05
English to Italian
+ ...
TOPIC STARTER
thanks Aug 15, 2009

Russell Jones wrote:

Hi Cecilia

You should be aware that you can only receive so much through Paypal (about £4,400 I believe) before they start asking questions. I think this is under pressure from the tax authorities, to ensure that this payment method is not used to bypass tax liabilities.

Russell


thanks Russell, I'l keep that in mind.


 

Charlie Bavington  Identity Verified
Local time: 19:05
French to English
Yes, and no Aug 16, 2009

Cecilia Di Vita wrote:

As far as the invoice itself is concerned, I understand that since I'm not VAT registered I only need to indicate "Not registered for VAT" and that should solve the problem with customers from countries who are not obsessed with this kind of things such as Italy, Spain and Portugal.


Even if you were registered for VAT, you wouldn't charge it to customers in EU countries anyway, other than private individuals.
Cross-border B2B translation is one of those things that effectively falls outside the scope of VAT (this effectively means that you can choose to ignore this turnover when deciding whether or not to register for VAT in the UK, although you should notify HMRC anyway, because otherwise it will get flagged when you submit your tax return).

There has been, as you might imagine, much discussion of this topic on this website in the past. Judicious searching (easier said than done, I admit - the search function on here sucks) may bring up some tasty phrases to slap on invoices for Spain, Italy etc that some clients might find more reassuring (with refs to EU directives and stuff) than "I'm not registered". I appreciate it amounts to the same thing - no VAT - but other countries have much lower thresholds and find it hard to grasp that a full time pro might not be registered.


 

Cecilia Di Vita  Identity Verified
United Kingdom
Local time: 19:05
English to Italian
+ ...
TOPIC STARTER
thanks Charlie Aug 17, 2009

I have searched the subject in the Proz forum archives before posting this thread of course, even though most of them date back to 2002 or so. So I thought it would be worth asking more experienced colleagues anyway, as the legislation may as well have changed over the years. Actually some colleagues have sent me useful custom phrases to put on invoices for customers in, say, Italy, which I'll keep on record in case I need them in the future. However, both previous discussions and private messages from other colleagues confirm that most countries are fine with a simple phrase like "Not registered for VAT" so I think I'll stick with that.

 

Charlie Bavington  Identity Verified
Local time: 19:05
French to English
Fair enough Aug 17, 2009

Whatever works best for you, of courseicon_smile.gif

The point I was trying to draw your attention to was the combination of your thread title plus this:


I know that VAT is not invloved as I don't need to register for VAT until my yearly income reaches 61k £.

(my emphasis)

The implication to me here is that because you are not VAT-registered, you don't need to bother with VAT, in the context of invoicing foreign customers from the UK (being the thread title).
This led me to think that you (or other people reading this) might believe the converse to be true; i.e. if on the other hand you were VAT-registrered, then you would need to charge VAT. Which is not the case (in the majority of circs - unless the clients are private individuals).
It might have just been the turn of phrase you were using. I just wanted to clarify - not just for you, but for all those who can successfully get the forum search to turn up what they are looking foricon_smile.gif

I use a simple "VAT not applicable" message, since if I ever do register for VAT, I'm not sure I can be bothered changing the message on my invoices when the situation effectively remains unchanged as far as the client is concerned.


 

Cecilia Di Vita  Identity Verified
United Kingdom
Local time: 19:05
English to Italian
+ ...
TOPIC STARTER
thanks for the explanation Aug 17, 2009

Charlie Bavington wrote:

Whatever works best for you, of courseicon_smile.gif

The point I was trying to draw your attention to was the combination of your thread title plus this:


I know that VAT is not invloved as I don't need to register for VAT until my yearly income reaches 61k £.

(my emphasis)

The implication to me here is that because you are not VAT-registered, you don't need to bother with VAT, in the context of invoicing foreign customers from the UK (being the thread title).
This led me to think that you (or other people reading this) might believe the converse to be true; i.e. if on the other hand you were VAT-registrered, then you would need to charge VAT. Which is not the case (in the majority of circs - unless the clients are private individuals).
It might have just been the turn of phrase you were using. I just wanted to clarify - not just for you, but for all those who can successfully get the forum search to turn up what they are looking foricon_smile.gif

I use a simple "VAT not applicable" message, since if I ever do register for VAT, I'm not sure I can be bothered changing the message on my invoices when the situation effectively remains unchanged as far as the client is concerned.



Thanks Charlie, that wasn't the main point of my topic (even though that sentence about VAT may have been misleading, and I apologise about that) but the issue would have probably come out once I'd have registered for VAT, so thanks in advance! That surely saved me starting a new thread in the future.icon_smile.gif


 

Jack Doughty  Identity Verified
United Kingdom
Local time: 19:05
Member (2000)
Russian to English
+ ...
Mine Aug 17, 2009

Invoice%20skeleton.jpg

[Edited at 2009-08-17 16:48 GMT]


 


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