VAT rules for B2C translations for translator based in UK but under VAT threshold
Téma indítója: stephenkells

stephenkells
Local time: 22:14
Apr 8

Hi everyone,

I'm still unclear as to the rules over VAT post-brexit for B2C jobs. I very occasionally have B2C requests from clients in France. I'm based in the UK and am not registered for VAT. Am I now able to take these jobs on directly, without charging VAT and without the client paying VAT? Is this legal? Previously I went through a colleague in France who subcontracted the work out to me on behalf of the client, so I didn't charge VAT to my VAT-registered colleague for the wo
... See more
Hi everyone,

I'm still unclear as to the rules over VAT post-brexit for B2C jobs. I very occasionally have B2C requests from clients in France. I'm based in the UK and am not registered for VAT. Am I now able to take these jobs on directly, without charging VAT and without the client paying VAT? Is this legal? Previously I went through a colleague in France who subcontracted the work out to me on behalf of the client, so I didn't charge VAT to my VAT-registered colleague for the work done (reverse charge mechanism) and my colleague invoiced the client, including French VAT at the current rate.

Thanks for any ideas!

Stephen Kells.
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Tom in London
Egyesült Királyság
Local time: 22:14
Tag (2008 óta)
olasz - angol
VAT Apr 8

stephenkells wrote:

I'm based in the UK and am not registered for VAT. Am I now able to take these jobs on directly, without charging VAT ?


That's the only way you can take them on.

and without the client paying VAT?


Since you are not charging VAT, it is (obviously) impossible for the client to pay it.

Is this legal?


It would be illegal for you to do anything else.

Previously I went through a colleague in France who subcontracted the work out to me on behalf of the client, so I didn't charge VAT to my VAT-registered colleague for the work done (reverse charge mechanism) and my colleague invoiced the client, including French VAT at the current rate.


That was then, and this is now.


 

Chris S  Identity Verified
Egyesült Királyság
svéd - angol
+ ...
Let’s not give opinions when people want facts Apr 8

Tom in London wrote:

Since you are not charging VAT, it is (obviously) impossible for the client to pay it.

Is this legal?


It would be illegal for you to do anything else.


Tom, good to see you back, but you’re wrong on both counts. For many years my customers in the EU paid VAT that I didn’t collect from them.

It’s a common misconception that businesses “charge” VAT. They actually just collect it on behalf of the government. The government may instead collect it directly from the purchaser rather than the supplier.

As for OP’s question: I’m sorry, I don’t know. I know some businesses have now had to register for VAT abroad, but that was for goods. I’d get an opinion from the taxman.


 

Teresa Borges
Portugália
Local time: 22:14
Tag (2007 óta)
angol - portugál
+ ...
@Stephen Apr 8

"The supply of services by UK businesses to private individuals in the EU will be, in principle, considered as situated outside the EU and therefore not taxable under EU VAT legislation."

(European Commission, Directorate General on Taxation and Customs Union, Withdrawal of the United Kingdom and EU Rules in the Field of Value Added Tax (VAT) for Services, page 5)

Please check:

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"The supply of services by UK businesses to private individuals in the EU will be, in principle, considered as situated outside the EU and therefore not taxable under EU VAT legislation."

(European Commission, Directorate General on Taxation and Customs Union, Withdrawal of the United Kingdom and EU Rules in the Field of Value Added Tax (VAT) for Services, page 5)

Please check:

https://ec.europa.eu/info/sites/info/files/brexit_files/vat-services_en.pdf



[Edited at 2021-04-09 09:42 GMT]
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Mervyn Henderson
 

stephenkells
Local time: 22:14
TÉMAINDÍTÓ
thanks Apr 8

Thanks for both your responses. I've sent an email to HMRC asking them the same question, although who knows when they will get back to me. Thanks again, Stephen.

 

stephenkells
Local time: 22:14
TÉMAINDÍTÓ
thanks Teresa Apr 8

Thanks Teresa! Unless there are exceptions (which there seem to be for the supply of telecoms, broadcasting and electronic services), that seems clear.

 

RobinB  Identity Verified
Egyesült Államok
Local time: 16:14
német - angol
New rules in ATC/ITI Guide Apr 9

Stephen,

The relevant new VAT rules are described in the "ATC-ITI Post-Brexit Guide for Language Service Providers".

This also describes the situation you are in.

Professional services such as translation now fall under the "Special Rule", under which services are now deemed to be supplied where the customer belongs.

For a UK non-VAT registered business, this means you may be liable to register for and pay VAT in the EU member state in which th
... See more
Stephen,

The relevant new VAT rules are described in the "ATC-ITI Post-Brexit Guide for Language Service Providers".

This also describes the situation you are in.

Professional services such as translation now fall under the "Special Rule", under which services are now deemed to be supplied where the customer belongs.

For a UK non-VAT registered business, this means you may be liable to register for and pay VAT in the EU member state in which the customer is located, so you'll have to check the VAT registration and payment rules in that member state.

The guide specifically says: "If you are not VAT registered, you are likely to have to make a UK voluntary VAT registration in order to get an EU VAT registration".

So the new situation doesn't look very bright, to be honest. Although you may be able to use a commercial service to handle all VAT-related documentation and payments, it's probably not going to be worth the candle unless you do a significant amount of B2C business in e.g. France.

Best of luck,

Robin
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Chris S
 

stephenkells
Local time: 22:14
TÉMAINDÍTÓ
thanks Robin Apr 9

Thank you Robin, that's massively useful and appears to put this to rest, namely, if you're not registered for VAT in the UK and want to work with non Vat-registered customers in the EU you need to register for VAT in the relevant country or else work through a third party in the relevant country who is regsitered for VAT, i.e act as a subcontractor for them.

Thanks to all who contributed!

Stephen.


 

Tom in London
Egyesült Királyság
Local time: 22:14
Tag (2008 óta)
olasz - angol
this is madness Apr 9

RobinB wrote:

For a UK non-VAT registered business, this means you may be liable to register for and pay VAT in the EU member state in which the customer is located, so you'll have to check the VAT registration and payment rules in that member state.



This is madness. I am a UK non-VAT registered business. I have clients in seven EU Member States. If what you're saying is correct, it would mean that I would have to (a) check the VAT registration and payment rules in each one of those seven member states and (b) begin regularly making VAT returns and payments to the authorities of each one (in their language and according to their requirements).

So obviously what you wrote cannot be allowed to stand without comment.


Mervyn Henderson
Angie Garbarino
 

Chris S  Identity Verified
Egyesült Királyság
svéd - angol
+ ...
@Tom Apr 9

Don’t shoot the messenger, Tom. Best have a word with Boris.

Mervyn Henderson
 

Mervyn Henderson  Identity Verified
Spanyolország
Local time: 23:14
spanyol - angol
+ ...
This just in: Apr 9

Tense moments in central London around noon today, when a man holding a placard with "Stop the VAT madness" was cautioned by police for importuning passers-by going about their daily business:

"Checking VAT registrations with Johnny Foreigner? Not going to happen!" he shouted. "I have other plans. And especially when they can't even get the bloody grammar right, bejasus. I'm making a stand for all that is good and wholesome here, and I'll tell you something el ..."

Oh
... See more
Tense moments in central London around noon today, when a man holding a placard with "Stop the VAT madness" was cautioned by police for importuning passers-by going about their daily business:

"Checking VAT registrations with Johnny Foreigner? Not going to happen!" he shouted. "I have other plans. And especially when they can't even get the bloody grammar right, bejasus. I'm making a stand for all that is good and wholesome here, and I'll tell you something el ..."

Oh dear. Has the text faded out and disappeared? Not to worry. Simply register with ProZ.com's "This Just In" section to read more. Fifty euros a shot. We'll send you details of a Spanish bank account by and by.
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Chris S
Matthias Brombach
 

stephenkells
Local time: 22:14
TÉMAINDÍTÓ
hi Tom Apr 9

Hello Tom,

the vast majority of my clients have VAT numbers, and I think that probably applies to most people on proz, there is only an issue with B2C customers and very small businesses (in France the threshold for businesses to be VAT registered is something like 36,000 euros, I think). It has been the case since 2015 that if you didn't have a UK VAT number you could not legally invoice non VAT registered customers in the EU (for VAT registered customers you could use the reverse
... See more
Hello Tom,

the vast majority of my clients have VAT numbers, and I think that probably applies to most people on proz, there is only an issue with B2C customers and very small businesses (in France the threshold for businesses to be VAT registered is something like 36,000 euros, I think). It has been the case since 2015 that if you didn't have a UK VAT number you could not legally invoice non VAT registered customers in the EU (for VAT registered customers you could use the reverse charge mechanism) - I was hoping that might have changed post-Brexit but it doesn't appear to have done so....
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Matthias Brombach  Identity Verified
Németország
Local time: 23:14
Tag (2007 óta)
holland - német
+ ...
FAQ: VAT Apr 9

Mervyn Henderson wrote: Simply register with ProZ.com's "This Just In" section to read more. Fifty euros a shot.


Including VAT or will I be VAT exempted as an independent worker reading from Germany (West)?

[Bearbeitet am 2021-04-09 13:07 GMT]


Chris S
Mervyn Henderson
 

RobinB  Identity Verified
Egyesült Államok
Local time: 16:14
német - angol
Why? Apr 10

Tom,

Why is it "obvious" that what I wrote "cannot be allowed to stand without comment"? I was describing verifiable, objective facts, after all.

Because you *think* it's madness? Although the UK government is imposing the same rules for B2C customers in the UK?

If your customers in seven EU member states are B2B customers, you have nothing to worry about.

But if they're B2C customers, shouldn't you already have been aware of this new regime? A
... See more
Tom,

Why is it "obvious" that what I wrote "cannot be allowed to stand without comment"? I was describing verifiable, objective facts, after all.

Because you *think* it's madness? Although the UK government is imposing the same rules for B2C customers in the UK?

If your customers in seven EU member states are B2B customers, you have nothing to worry about.

But if they're B2C customers, shouldn't you already have been aware of this new regime? After all, it was originally scheduled to take effect from 1 January 2021, and was postponed for six months because of the pandemic. And the actual details have been known for quite some time now.
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Chris S
 


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VAT rules for B2C translations for translator based in UK but under VAT threshold

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