VAT question - UK---EU
Thread poster: maxmm

maxmm
United Kingdom
Jul 6, 2015

1. I am self-employed in the UK and the resident in the UK.
2. I am going to buy some services (on-line) from a company within the EU
3. They are VAT-registered, I am not.
4. They suggested they would invoice me without the VAT

Question: is it OK, will I have to pay the VAT here in the UK for it? I am not registered for the VAT number, they did not ask for it, just a company registration number


 

Michael Beijer  Identity Verified
United Kingdom
Local time: 08:49
Member (2009)
Dutch to English
+ ...
see the latest VAT discussion here in the forums… Jul 6, 2015

maxmm wrote:

1. I am self-employed in the UK and the resident in the UK.
2. I am going to buy some services (on-line) from a company within the EU
3. They are VAT-registered, I am not.
4. They suggested they would invoice me without the VAT

Question: is it OK, will I have to pay the VAT here in the UK for it? I am not registered for the VAT number, they did not ask for it, just a company registration number


Maybe relevant or useful:

http://www.proz.com/forum/translation_in_the_uk/287644-the_pros_cons_of_uk_vat_registration.html

Michael


 

Andrea Halbritter  Identity Verified
France
Local time: 09:49
Member (2014)
French to German
+ ...
You have to pay VAT Jul 7, 2015

If you have no VAT number, you have to pay VAT even if your customers are in another country in the EU.

 

Michael Wetzel  Identity Verified
Germany
Local time: 09:49
German to English
agree: must pay VAT Jul 7, 2015

I'm not sure whether you need to pay the foreign VAT (normal invoicing procedure for private clients in another EU country) or UK VAT (possible exception in the case of the UK because there are loads of small businesses there unable to secure a VAT number), but you almost certainly need to pay one or the other. I would think that paying the foreign tax would be the simplest route, since you won't be able to get the tax refunded anyway. If you could save a lot of money, you might look into taxing the service in the UK, but that would involve research and reporting and paying the UK tax (would cost a substantial amount of time).

 

Jean-Christophe Duc  Identity Verified
France
Local time: 09:49
English to French
+ ...
I don't think so Jul 7, 2015

maxmm wrote:

1. I am self-employed in the UK and the resident in the UK.
2. I am going to buy some services (on-line) from a company within the EU
3. They are VAT-registered, I am not.
4. They suggested they would invoice me without the VAT

Question: is it OK, will I have to pay the VAT here in the UK for it? I am not registered for the VAT number, they did not ask for it, just a company registration number


If memory serves me right, you only pay VAT in the UK when your income goes above a certain threshold (but better check with your local tax office!).

For intra-EU invoices for electronic services, normally the client is responsible for the VAT in his own country, therefore you should not in theory have to invoice them.


 

Jack Doughty  Identity Verified
United Kingdom
Local time: 08:49
Member (2000)
Russian to English
+ ...
Registration, not payment Jul 7, 2015

you only have to REGISTER for VAT in the UK when your income goes above a certain threshold. Of course you have to pay VAT when it is charged to you, whether it is for services or a dishwasher.

 

Chris S  Identity Verified
United Kingdom
Swedish to English
+ ...
They shouldn't charge you VAT Jul 7, 2015

We charge VAT on services supplied within the UK but never to any other countries, EU or not.

 

Gabriele Demuth  Identity Verified
United Kingdom
Local time: 08:49
Member (2014)
English to German
You are responsible for your own taxes and not those of others Jul 7, 2015

I assume you are registered as a sole trader? www.gov.uk/vat-registration

I believe that it is the responsibility of the business you are buying services from to have their tax affairs in order and pay their taxes or pass these on to you?


 

Michael Wetzel  Identity Verified
Germany
Local time: 09:49
German to English
They sound incompetent ... Jul 7, 2015

... so I like the tone of Gabriele's answer. However, the problem is that if they send you a proper inner-EU invoice with no foreign VAT on it, then it will state something about the "reverse-charge procedure", meaning that reporting and paying the UK VAT that is then due would be your responsibility.

I say that they sound incompetent, because they or their accountant has to periodically fill out and submit a form containing the VAT numbers and totals due for every invoice to non-domestic EU clients. What are they going to write in your case? Maybe there is some available work-around for the UK problem, but unless it is going to save a lot of money, it all seems like a giant waste of time.


 

Sheila Wilson  Identity Verified
Spain
Local time: 08:49
Member (2007)
English
+ ...
You just have to pay the invoice you're presented with Jul 7, 2015

Gabriele Demuth wrote:
I believe that it is the responsibility of the business you are buying services from to have their tax affairs in order and pay their taxes or pass these on to you?

AFAIK, unless the particular services in question are VAT-exempt (or zero-rated, or whatever the correct term is), such as education in some circumstances, then you should receive an invoice with VAT included, which of course you'd have to pay.

But if you're invoiced ex-VAT, with no mention of VAT anywhere, then it isn't up to you to sort it out. Either the supplier is absorbing the VAT element (i.e. paying it out of the total amount received), or heading for trouble with the VAT authorities. Just enjoy the fact that the service is 20-odd percent less than it should have beenicon_smile.gif.


 

2G Trad  Identity Verified
Italy
Local time: 09:49
Member (2000)
English to Italian
+ ...
EU VAT unregistered people pay VAT Jul 7, 2015

maxmm:
1. I am self-employed in the UK and the resident in the UK.
2. I am going to buy some services (on-line) from a company within the EU
3. They are VAT-registered, I am not.
4. They suggested they would invoice me without the VAT

Question: is it OK, will I have to pay the VAT here in the UK for it? I am not registered for the VAT number, they did not ask for it, just a company registration number


That company is wrong.
They have to charge you their country's VAT, since you are not EU VAT registered (I assume they have a valid EU VAT number) so they can't apply the reverse charge procedure on their invoice to you.

Cheers
Gianni


 

Andrea Halbritter  Identity Verified
France
Local time: 09:49
Member (2014)
French to German
+ ...
VAT has to be charged in your case (100 % sure) Jul 7, 2015

I am sure about what I say: VAT has to be charged in your case (as I work in a cooperative all my invoices are controlled by a bookkeeper so I am really sure about what I am saying, had already that case a customer in the UK without a VAT number...)

 


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VAT question - UK---EU

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