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UK resident VAT
Thread poster: Karen Roberts
Karen Roberts
Karen Roberts  Identity Verified
United Kingdom
Local time: 23:40
Member
Spanish to English
+ ...
Aug 13, 2018

Hi, I am a UK resident after living and translating in Spain for 15 years. I understand that I don't need to pay VAT as I earn below the threshold over here. However, nearly all Spanish translation agencies keep asking me for a VAT number and it seems they won't consider working with me unless I have one. Is it normal to register for VAT anyway even though you shouldn't have to? Also if I register and earn below the threshold does this mean I have to pay it or can I just register to get a number... See more
Hi, I am a UK resident after living and translating in Spain for 15 years. I understand that I don't need to pay VAT as I earn below the threshold over here. However, nearly all Spanish translation agencies keep asking me for a VAT number and it seems they won't consider working with me unless I have one. Is it normal to register for VAT anyway even though you shouldn't have to? Also if I register and earn below the threshold does this mean I have to pay it or can I just register to get a number? Any help much appreciated.Collapse


 
Tom in London
Tom in London
United Kingdom
Local time: 23:40
Member (2008)
Italian to English
Don't do it Aug 13, 2018

Karen Roberts wrote:

Hi, I am a UK resident after living and translating in Spain for 15 years. I understand that I don't need to pay VAT as I earn below the threshold over here. However, nearly all Spanish translation agencies keep asking me for a VAT number and it seems they won't consider working with me unless I have one. Is it normal to register for VAT anyway even though you shouldn't have to? Also if I register and earn below the threshold does this mean I have to pay it or can I just register to get a number? Any help much appreciated.


Don't do it! You are under no obligation to register for VAT and if you do it will make all your admin much more complicated. In any case simply because there are some very ill-informed Spanish accountants who don't understand their own work is not a good reason why you should register for VAT in the UK.

I have often invoiced clients in Spain. On my invoices I have simply written "Invoice not subject to VAT in accordance with UK legislation". This has never been queried and the invoices have been paid.

[Edited at 2018-08-13 13:42 GMT]


Ricardo Suin
Annamaria Sondrio
 
Ricardo Suin
Ricardo Suin  Identity Verified
Spain
English to Spanish
+ ...
Just explain them your situation Aug 13, 2018

Tom in London wrote:

Karen Roberts wrote:

Hi, I am a UK resident after living and translating in Spain for 15 years. I understand that I don't need to pay VAT as I earn below the threshold over here. However, nearly all Spanish translation agencies keep asking me for a VAT number and it seems they won't consider working with me unless I have one. Is it normal to register for VAT anyway even though you shouldn't have to? Also if I register and earn below the threshold does this mean I have to pay it or can I just register to get a number? Any help much appreciated.


Don't do it! You are under no obligation to register for VAT and if you do it will make all your admin much more complicated, and in any case you should not register for VAT simply because there are some very ill-informed Spanish accountants who don't understand their own work.

I have often invoiced clients in Spain. On my invoices I have simply written "Invoice not subject to VAT in accordance with UK legislation". This has never been queried and the invoices have been paid.

[Edited at 2018-08-13 13:37 GMT]


As he says, it is because they are not well informed. In Spain it is supposed to be compulsory to be registered in the Seguridad Social and Hacienda (at least only in Hacienda), so maybe they do not understand that this is not the case in other countries. Just tell them your reasons and it should be enough (maybe they also refer to the ROI, IVA intercomunitario...).


 
Sheila Wilson
Sheila Wilson  Identity Verified
Spain
Local time: 23:40
Member (2007)
English
+ ...
Educate your clients; or sack them; or register for VAT Aug 13, 2018

Karen Roberts wrote:
However, nearly all Spanish translation agencies keep asking me for a VAT number and it seems they won't consider working with me unless I have one. Is it normal to register for VAT anyway even though you shouldn't have to?

I've only ever heard before now that it was a problem for a few of them. You seem to have chosen a bad set . I'm sure you know how it works in Spain. Everyone here has a VAT number (well, TBH I don't but then the Canary Islands are an exception to most things here) so they expect everyone elsewhere around the EU to have one too. But that's due to ignorance. At some stage, agencies should find out that not all Spanish rules apply globally. Have you tried to educate your client? I know others have done it by citing the appropriate EU texts.

Also if I register and earn below the threshold does this mean I have to pay it or can I just register to get a number? Any help much appreciated.

You can register voluntarily from the first euro of income. What do you mean "pay it"? End consumers pay VAT, whereas businesses just collect VAT from some clients/customers on behalf of the government and temporarily gift the authorities the VAT on purchases until they get a refund (or often they simply record the details of the VAT element). It's just a game of checks and balances and if you stick to the rules there's no profit or loss. Well, to be more accurate, there is a potential profit for you in that you won't need to pay the VAT on your new IT hardware/software, ProZ.com membership, stocks of paper and ink, etc. And there's a potential loss if you pay someone else to manage your VAT reporting.


Valérie Ourset
 
Angela Malik
Angela Malik  Identity Verified
United Kingdom
Local time: 23:40
German to English
+ ...
A workaround? Aug 13, 2018

Karen Roberts wrote:

Also if I register and earn below the threshold does this mean I have to pay it or can I just register to get a number?


If you register for VAT, then you have to charge VAT to your UK-based clients and you have to pay VAT where applicable.

For what it's worth, before my company was VAT-registered, I just included the following on my invoices to clients based in Spain:

VAT exempt invoice in accordance with article 196 of Directive 2006/112/EC. This service is subject to the VAT reverse charge.
I certify that in accordance with articles 214.2 and 272.1 and letter d of the 2006/112/EC Directive I do not have a VAT number.
Applicable national legislation: HMRC Notice 700/1 (Apr 2010) Section 2 ff

Factura exenta de IVA en aplicación de artículo 196 de la Directiva 2006/112/CE. Este servicio está sujeto a la inversión del sujeto pasivo del IVA.
Yo certifico que no tengo número del IVA según los artículos 214.2 y 272.1 y la letra d de la Directiva 2006/112/CE.
Legislación nacional aplicable (reino unido): Aviso HMRC 700 / 1 (abril 2010) Sección 2 y siguientes


This satisfied all of my Spain-based clients. If they needed some number for their own records, I just gave them my National Insurance number.

I haven't had to do this workaround in a long time so I'm not sure it's still valid but I think the laws etc are still current, so I don't know why it wouldn't work in your case. Maybe someone more "in the know" can confirm.


 
Karen Roberts
Karen Roberts  Identity Verified
United Kingdom
Local time: 23:40
Member
Spanish to English
+ ...
TOPIC STARTER
Good to know Aug 13, 2018

Tom in London wrote:

Karen Roberts wrote:

Hi, I am a UK resident after living and translating in Spain for 15 years. I understand that I don't need to pay VAT as I earn below the threshold over here. However, nearly all Spanish translation agencies keep asking me for a VAT number and it seems they won't consider working with me unless I have one. Is it normal to register for VAT anyway even though you shouldn't have to? Also if I register and earn below the threshold does this mean I have to pay it or can I just register to get a number? Any help much appreciated.


Don't do it! You are under no obligation to register for VAT and if you do it will make all your admin much more complicated. In any case simply because there are some very ill-informed Spanish accountants who don't understand their own work is not a good reason why you should register for VAT in the UK.

I have often invoiced clients in Spain. On my invoices I have simply written "Invoice not subject to VAT in accordance with UK legislation". This has never been queried and the invoices have been paid.

[Edited at 2018-08-13 13:42 GMT]



Thanks Tom, I was hoping I wouldn't have to!


 
Karen Roberts
Karen Roberts  Identity Verified
United Kingdom
Local time: 23:40
Member
Spanish to English
+ ...
TOPIC STARTER
ROI Aug 13, 2018

Ricardo Suin wrote:

Tom in London wrote:

Karen Roberts wrote:

Hi, I am a UK resident after living and translating in Spain for 15 years. I understand that I don't need to pay VAT as I earn below the threshold over here. However, nearly all Spanish translation agencies keep asking me for a VAT number and it seems they won't consider working with me unless I have one. Is it normal to register for VAT anyway even though you shouldn't have to? Also if I register and earn below the threshold does this mean I have to pay it or can I just register to get a number? Any help much appreciated.


Don't do it! You are under no obligation to register for VAT and if you do it will make all your admin much more complicated, and in any case you should not register for VAT simply because there are some very ill-informed Spanish accountants who don't understand their own work.

I have often invoiced clients in Spain. On my invoices I have simply written "Invoice not subject to VAT in accordance with UK legislation". This has never been queried and the invoices have been paid.

[Edited at 2018-08-13 13:37 GMT]


As he says, it is because they are not well informed. In Spain it is supposed to be compulsory to be registered in the Seguridad Social and Hacienda (at least only in Hacienda), so maybe they do not understand that this is not the case in other countries. Just tell them your reasons and it should be enough (maybe they also refer to the ROI, IVA intercomunitario...).



Yes a client did refer to the ROI but as I'm not registered I couldn't do that either. Since then they haven't paid my invoice either.


 
Tom in London
Tom in London
United Kingdom
Local time: 23:40
Member (2008)
Italian to English
The whole point Aug 13, 2018

Karen Roberts wrote:

Thanks Tom, I was hoping I wouldn't have to!


The whole point of the UK legislation was to simplify things for small businesses.But in 2020 the government has threatened to change the law. So we'll have to watch out. Unless of course we get a different government before then....

https://businessadvice.co.uk/tax-and-admin/year-end/autumn-budget-2017-no-reduction-to-vat-threshold-for-small-businesses/


 
Karen Roberts
Karen Roberts  Identity Verified
United Kingdom
Local time: 23:40
Member
Spanish to English
+ ...
TOPIC STARTER
Thought as much Aug 13, 2018

Sheila Wilson wrote:

Karen Roberts wrote:
However, nearly all Spanish translation agencies keep asking me for a VAT number and it seems they won't consider working with me unless I have one. Is it normal to register for VAT anyway even though you shouldn't have to?

I've only ever heard before now that it was a problem for a few of them. You seem to have chosen a bad set . I'm sure you know how it works in Spain. Everyone here has a VAT number (well, TBH I don't but then the Canary Islands are an exception to most things here) so they expect everyone elsewhere around the EU to have one too. But that's due to ignorance. At some stage, agencies should find out that not all Spanish rules apply globally. Have you tried to educate your client? I know others have done it by citing the appropriate EU texts.

Also if I register and earn below the threshold does this mean I have to pay it or can I just register to get a number? Any help much appreciated.

You can register voluntarily from the first euro of income. What do you mean "pay it"? End consumers pay VAT, whereas businesses just collect VAT from some clients/customers on behalf of the government and temporarily gift the authorities the VAT on purchases until they get a refund (or often they simply record the details of the VAT element). It's just a game of checks and balances and if you stick to the rules there's no profit or loss. Well, to be more accurate, there is a potential profit for you in that you won't need to pay the VAT on your new IT hardware/software, ProZ.com membership, stocks of paper and ink, etc. And there's a potential loss if you pay someone else to manage your VAT reporting.


Yes I suspected that was the case. I used to have a IVA number over there and I think they expect everything to be the same everywhere. I did write back and I explained in Spanish that my earnings were below the UK threshold but I've still yet to be paid. One subsequent client asked me for a VAT number before they offered me work and once I explained the situation they didn't give me the job. This made me wonder if they were set to gain if I did charge VAT and Spanish clients used this as selection criteria.


 
Karen Roberts
Karen Roberts  Identity Verified
United Kingdom
Local time: 23:40
Member
Spanish to English
+ ...
TOPIC STARTER
Thank you Angela Aug 13, 2018

Angela Rimmer wrote:

Karen Roberts wrote:

Also if I register and earn below the threshold does this mean I have to pay it or can I just register to get a number?


If you register for VAT, then you have to charge VAT to your UK-based clients and you have to pay VAT where applicable.

For what it's worth, before my company was VAT-registered, I just included the following on my invoices to clients based in Spain:

VAT exempt invoice in accordance with article 196 of Directive 2006/112/EC. This service is subject to the VAT reverse charge.
I certify that in accordance with articles 214.2 and 272.1 and letter d of the 2006/112/EC Directive I do not have a VAT number.
Applicable national legislation: HMRC Notice 700/1 (Apr 2010) Section 2 ff

Factura exenta de IVA en aplicación de artículo 196 de la Directiva 2006/112/CE. Este servicio está sujeto a la inversión del sujeto pasivo del IVA.
Yo certifico que no tengo número del IVA según los artículos 214.2 y 272.1 y la letra d de la Directiva 2006/112/CE.
Legislación nacional aplicable (reino unido): Aviso HMRC 700 / 1 (abril 2010) Sección 2 y siguientes


Thank you, I'll try that on my invoices next time.

This satisfied all of my Spain-based clients. If they needed some number for their own records, I just gave them my National Insurance number.

I haven't had to do this workaround in a long time so I'm not sure it's still valid but I think the laws etc are still current, so I don't know why it wouldn't work in your case. Maybe someone more "in the know" can confirm.


 
Christopher Schröder
Christopher Schröder
United Kingdom
Member (2011)
Swedish to English
+ ...
Register! Aug 13, 2018

As I always say in these discussions, I cannot see any good reason for a freelance translator not to register for VAT. The admin is negligible and you get 20% off everything you buy. What’s not to like?

Maria Teresa Borges de Almeida
Vesa Korhonen
Erik Freitag
Joe France
Marijke Singer
 
Tom in London
Tom in London
United Kingdom
Local time: 23:40
Member (2008)
Italian to English
Not everything Aug 13, 2018

Chris S wrote:

As I always say in these discussions, I cannot see any good reason for a freelance translator not to register for VAT. The admin is negligible and you get 20% off everything you buy. What’s not to like?


The admin requires you to make a VAT return every 3 months. An unnecessary added PITA. And you don't get 20% off everything you buy. Only off whatever you buy that is strictly and necessarily required for your work as a translator, which is almost nothing apart from stationery.


 
Erik Freitag
Erik Freitag  Identity Verified
Germany
Local time: 00:40
Member (2006)
Dutch to German
+ ...
It adds up Aug 13, 2018

Tom in London wrote:

The admin requires you to make a VAT return every 3 months. An unnecessary added PITA. And you don't get 20% off everything you buy. Only off whatever you buy that is strictly and necessarily required for your work as a translator, which is almost nothing apart from stationery.


I agree with Chris. I get 19% off of stationary, literature, hard- and software, landline and mobile phone bills, electricity, water, heating, furniture, travel expenses, and other things I forget. Admin is negligible (at least in Germany, this may of course be different elsewhere). I dare say that a lot of translators will struggle to achieve the hourly rate they can reach by doing a VAT return.


Valérie Ourset
Joe France
Christopher Schröder
Maria Teresa Borges de Almeida
 
Joe France
Joe France  Identity Verified
United Kingdom
Local time: 23:40
Member (2016)
German to English
+ ...
Where's the downside? Aug 14, 2018

I agree with Chris and Erik - registering for VAT is far from the boogeyman it's sometimes portrayed as on here. Getting 20% back on VAT-eligible products is an absolute dream, and Erik has already listed some of the myriad items you can claim. I also work in a shared office to stave off boredom working home alone, and so taking the 20% VAT off that makes it very reasonable indeed.

Granted, I use an accountant now - but when I did my own returns, I found that a VAT return takes no t
... See more
I agree with Chris and Erik - registering for VAT is far from the boogeyman it's sometimes portrayed as on here. Getting 20% back on VAT-eligible products is an absolute dream, and Erik has already listed some of the myriad items you can claim. I also work in a shared office to stave off boredom working home alone, and so taking the 20% VAT off that makes it very reasonable indeed.

Granted, I use an accountant now - but when I did my own returns, I found that a VAT return takes no time at all. Fine, it's once every three months, but it's the easiest tax document you'll ever submit - and you get the VAT back just a few days after! It's really not complicated, registering is free and it pacifies clients who maybe don't know their tax law as well as they should. What's not to like?
Collapse


Christopher Schröder
Maria Teresa Borges de Almeida
Valérie Ourset
 
Tom in London
Tom in London
United Kingdom
Local time: 23:40
Member (2008)
Italian to English
Stationary? Aug 14, 2018

Erik Freitag wrote:

.... I get 19% off of stationary...



My own stationEry purchases are minimal since almost nothing I do is paper-based.

I recently bought a replacement toner cartridge for my printer, so I could have recouped 50% of the the VAT on that (only 50% of the VAT would be recoverable since I also use the printer for private purposes as well). The cartridge will last me for months and months because I almost never print anything - so the VAT, were I to claim it, would be infinitesimally small.

Hardware? I haven't bought any in years and again, only 50% of the VAT would be recoverable.

Landline and mobile phone bills bills? I never make phone calls that are related to my work.

Literature? I dont know what you mean. If you mean books, that would only be books that relate strictly to my work as a translator; and anyway here in the UK VAT is not applicable to books.

Software? Maybe once a year I buy software and again, 50% of that cost is for non-business purposes.

Electricity, water, heating? Only about 10% of my bills are related to my work.

Furniture? Let's see....when was the last time I bought any work-related furniture....a chair, about 4 years ago.

Travel expenses? What travelling do I do that is strictly related to my work as a translator? None.

Believe me, doing 3-monthly VAT returns, keeping the records, doing the paperwork, and making the payments would cost me more (in terms of time and nuisance) than not being registered for VAT.

N.B. the tax authorities in the UK are very draconian about what are work-related expenses and what are not. If they catch you claiming expenses to which you are not entitled, you'll be in hot water.

P.S. and anyway, none of that has got anything to do with the stupidity of (some) Spanish accountants who don't understand that Spanish tax rules don't apply to taxpayers in other countries.

[Edited at 2018-08-14 08:48 GMT]


Carlos Alvarez
 
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