UK based translators and Spanish agencies
Thread poster: Anna Hjalmarsson

Anna Hjalmarsson  Identity Verified
United Kingdom
Local time: 14:36
Member (2015)
English to Swedish
+ ...
Jan 9

Dear colleagues,
I have a prospective client in Spain (an agency) asking me to provide a certificate of residence to avoid double taxation. The UK authorities (HMRC) will only provide me with a "confirmation of residence" until I've received my first pay check from this particular agency. At the agency in question they claim they've never encountered this problem before with any other UK based translators, and say that without the certificate, they will have to deduce tax (somewhere around 25%) from my pay. HMRC says I'll have to reclaim that tax from the Spanish authorities - I can only imagine the hazzle...
It's a catch 22 and I don't know what to do. Does anyone have experience of this particular issue Spain/UK?

Many thanks!
Anna


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Sheila Wilson  Identity Verified
Spain
Local time: 14:36
Member (2007)
English
+ ...
They're making problems for themselves and for you Jan 9

Anna Hjalmarsson wrote:
I have a prospective client in Spain (an agency) asking me to provide a certificate of residence to avoid double taxation. The UK authorities (HMRC) will only provide me with a "confirmation of residence" until I've received my first pay check from this particular agency. At the agency in question they claim they've never encountered this problem before with any other UK based translators, and say that without the certificate, they will have to deduce tax (somewhere around 25%) from my pay. HMRC says I'll have to reclaim that tax from the Spanish authorities - I can only imagine the hazzle...
It's a catch 22 and I don't know what to do. Does anyone have experience of this particular issue Spain/UK?

Yes, they have to be able to show the Spanish authorities that they haven't been intentionally dealing with Spain-based freelancers and failing to withhold these taxes. No, they don't have to have any particular piece of paper. A confirmation of residence should be absolutely fine as you are supposed to be registered as a freelancer in your country of residence, as you're being taxed as a physical person.

I suppose you've already done the work and now they're making it seem as though they can't pay you the full amount? Hmm...


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Anna Hjalmarsson  Identity Verified
United Kingdom
Local time: 14:36
Member (2015)
English to Swedish
+ ...
TOPIC STARTER
Confirmation vs certificate of residence Jan 9

Thanks for your quick reply, Sheila! No, I haven't started working for them yet; want to sort out the paper work first. I have been sent a confirmation of residence from the HMRC, which basically contains the same info as the certificate, it seems, although the agency claims they need a certificate - and that, the HMRC won't give me as I cannot declare any income from the agency yet... Any input..?

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Sheila Wilson  Identity Verified
Spain
Local time: 14:36
Member (2007)
English
+ ...
What a nuisance these agencies are Jan 9

Well, you can't force them to accept it. They don't understand the requirements and reasons so want to cover themselves at all costs. But I wouldn't advise you to let them deduct the tax unless you can afford to lose it. Getting money out of the Spanish government is not easy, especially if you don't live here. It could well take a year or so.

Maybe they'll listen to reason if you're firm. OTOH, I can't understand why on earth a fiscal residency certificate should be tied to having received a payment from a client. Here in Spain and France they are totally independent of the client. The issue here is nothing to do with double taxation; it's about the taxation point. Unless you can prove otherwise, a company must assume you are subject to their own taxation rules. Are you sure HMRC is aware that you're self-employed and presenting an invoice, not earning a salary?


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Anna Hjalmarsson  Identity Verified
United Kingdom
Local time: 14:36
Member (2015)
English to Swedish
+ ...
TOPIC STARTER
nuisance indeed... Jan 9

Good point! Maybe I wasn't clear enough about the fact that I'm self-employed. I'll chase the HMRC tomorrow again... phew!

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Gabriele Demuth  Identity Verified
United Kingdom
Local time: 14:36
Member (2014)
English to German
Just to be pedantic... Jan 10

Being self-employed means that you do not receive pay-checks and you don't work for anyone, but you work with them and they pay your invoices.

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Myriam Garcia Bernabe  Identity Verified
United Kingdom
Local time: 14:36
Member (2003)
English to Spanish
Tax matters Jan 10

Dear Anna,

Being a Spanish freelancer based in the UK for the past 23 years, maybe I can help you out.

Firstly, I assume you have your UTR (Unique Tax Reference) Number from the HMRC, which you can add to your invoice and explain to the Spanish agency that this is the NIF equivalent in Britain.

Secondly, you can log into your HMRC account and extract an accounting registration page that will show your HMRC details in the UK. This you can send to the agency in PDF format. This should work as the equivalent of the Spanish RETA.

You must stress that you are not subject to IRPF in Spain since you are already a tax subject (contribuyente) under UK law and you can simply demonstrate it with the above.

I hope this helps. If not, please write to me privately and we can take it from there.

Best of luck,
Myriam


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Emma Brown  Identity Verified
United Kingdom
Local time: 14:36
French to English
+ ...
Similar problem Jan 10

Hello,

I am registered as a sole trader with HMRC in the UK and have a similar problem with a Spanish translation agency. HMRC has provided me with a certificate of residency in the UK and I have supplied this to the agency along with my unique taxpayer reference, but the agency is now asking that I register for a "NIF intracomunitario". At first I though they meant in Spain, but they want me to register in the UK. I'm not sure what this means or how to go about doing it. Does this mean that I will need to register for VAT? I don't really want to do this as I'm already registered as a sole trador.

Thank you for any light you can shed on this!

Emma.


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Anna Hjalmarsson  Identity Verified
United Kingdom
Local time: 14:36
Member (2015)
English to Swedish
+ ...
TOPIC STARTER
Certificate of residence and VAT number Jan 10

Thanks for your input, everyone! I actually managed to get hold of the HMRC over the phone, and to my great (and pleasant) surprise, they will send me a certificate immediately - so that's all settled now. FYI the reason I was given a letter of confirmation and not a certificate of residence in the first place was that I - in the online application to get the certificate - put zero as income from the agency in question (which is true as I haven't worked for them yet). Apparently I should just have put a random figure there, to show that I needed the certificate for work related purposes and not just as a private person to show that I am living in the UK for whatever reason.

To Emma: I have had to apply for a VAT number as I am working for the EU institutions (mandatory for registration in the European VIES system), but all I do now is declare 0 VAT every three months.


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Michael Wetzel  Identity Verified
Germany
Local time: 15:36
German to English
UK and VAT number Jan 11

Please take a look at the countless discussions here of the issue of VAT-exemption and VAT identification numbers in the UK. There is a very clear consensus that you cannot get a VAT number in the UK unless you give up your VAT-exemption.

That is counterintuitive for people from most of the rest of the EU, so you may have some explaining to do in the case of outsourcers who have limited experience in dealing with UK-based translators.

By the same token, I would think that if someone does register for a VAT identification number in the UK, then he or she would need to charge VAT on all invoices except for intracommunity invoices (where the reverse-charge procedure applies) and invoices to clients outside the EU.


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Anna Hjalmarsson  Identity Verified
United Kingdom
Local time: 14:36
Member (2015)
English to Swedish
+ ...
TOPIC STARTER
VAT Jan 11

Oh dear, Michael, are you saying that I should get back to my client charging VAT retrospectively, then? The agencies I've been in touch with in the EU but outside the UK regarding translations for the European institutions cite laws saying that all translators must be registered in VIES with their VAT number. From the HMRC, I've been unable to get a clear answer - but got a vague one saying that as I won't reach the threshold, then all I'd have to do is declare a zero VAT return.
I am a newly established freelancer, and VAT is a complicated issue, but all the agencies I've been in touch with say I shouldn't add VAT to my invoices. I realise VAT rules are different in each country, but as a general rule, do you (European translators) add VAT to your invoices to translation agencies?
Are there any other UK based translators working for the EU institutions out there?? I'd be extremely thankful to get in touch with you!
I'll read up a bit more on VAT on the threads here, thanks.


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Michael Wetzel  Identity Verified
Germany
Local time: 15:36
German to English
Please don't place too much faith in my information. Jan 11

Your invoices for agencies and other business clients that are outside the UK but inside the EU should not contain any VAT. I think(!) they need to contain a reference to the reverse-charge procedure.
They should not contain VAT regardless of whether or not you are VAT-exempt in the UK.
Many (most?) EU clients will initially expect UK freelancers to have a VAT identification number, because that is how things work elsewhere and your lack of one complicates their bookkeeping. However, their expectation does not necessarily mean that they really need one from you.

The information from HMRC is interesting, if it is accurate. Maybe that is how the UK has actually dealt with this problem. I have no idea and no one else has mentioned that as a possibility before.

Otherwise, as I said, the general consesnsus in other discussions here has been that it is impossible to get a VAT identification number in the UK without giving up your VAT exemption. If that is true, then you would have to charge VAT to any UK agencies or any other UK clients that you work for.

PS: I only answered to your response because you wrote "Oh dear" and I don't want you to lend more credence to my comments than they deserve. Hopefully, several UK translators will chime in with helpful information.

[Edited at 2017-01-11 09:27 GMT]


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Anna Hjalmarsson  Identity Verified
United Kingdom
Local time: 14:36
Member (2015)
English to Swedish
+ ...
TOPIC STARTER
VAT in the UK Jan 11

Thanks Michael!
I have tried to read up on the subject, but all I've learned is that VAT is a complicated matter. Again, if anyone reading this is based in the UK and working for EU institutions (or VAT registered but with earnings below the UK VAT threshold), please contact me!


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Emma Brown  Identity Verified
United Kingdom
Local time: 14:36
French to English
+ ...
Oh dear, indeed! Jan 11

Thank you Michael and Anna. I, too, have ploughed through the other fora since my original posting and am still a little confused about the whole thing! I am about to phone HMRC and will feed back if I get any concrete advice.

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Anna Hjalmarsson  Identity Verified
United Kingdom
Local time: 14:36
Member (2015)
English to Swedish
+ ...
TOPIC STARTER
VAT in the UK Jan 11

That would be very much appreciated, Emma!
Me too, if I learn something new, I'll share the knowledge here


Emma Brown wrote:

Thank you Michael and Anna. I, too, have ploughed through the other fora since my original posting and am still a little confused about the whole thing! I am about to phone HMRC and will feed back if I get any concrete advice.


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