VAT (again!) - based in UK, customer in NL
Thread poster: Hanneke Kroes

Hanneke Kroes
United Kingdom
Local time: 09:22
Member (Jan 2019)
English to Dutch
+ ...
Mar 7

Hi there!

(and apologies if I am repeating a question that keeps getting asked non stop!)

After years of translating in different companies, I have now started picking up freelance translation work next to my full time job. Very exciting!

I was lucky to get a very exciting job pretty much straight away but am now very confused re: VAT. I am not registered for VAT or as a company (yet) so I obviously cannot add VAT to the quote I am preparing. This seemed to
... See more
Hi there!

(and apologies if I am repeating a question that keeps getting asked non stop!)

After years of translating in different companies, I have now started picking up freelance translation work next to my full time job. Very exciting!

I was lucky to get a very exciting job pretty much straight away but am now very confused re: VAT. I am not registered for VAT or as a company (yet) so I obviously cannot add VAT to the quote I am preparing. This seemed to have confused the (NL based) customer somewhat.

As far as I understand I do not need to apply for a VAT number until I earn 80 000 GBP+ (fingers crossed...) - I simply register as self employed with HRMC and pay the applicable income tax. Or am I completely delusional?

I have reached out to an accountant/taxey type person already but if anyone can share some information in the mean time, that would be greatly appreciated!

Hanneke
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Chris S  Identity Verified
United Kingdom
Swedish to English
+ ...
You are right Mar 7

Even if you were VAT-registered, you wouldn’t charge them VAT!

Kay Denney
 

Hanneke Kroes
United Kingdom
Local time: 09:22
Member (Jan 2019)
English to Dutch
+ ...
TOPIC STARTER
That's a fast (and clear!) reply! Thank you! Mar 7

That's a fast (and clear!) reply! Thank you!

Maybe I have misunderstood his question then..?

But great to know I was right - it can be a little confusing starting out!

Thanks,
Hanneke


 

Helen Shiner  Identity Verified
United Kingdom
Local time: 09:22
German to English
+ ...
@Hanneke Mar 7

You should add the line, or something similar, to your invoice: 'UK VAT does not apply, but the recipient may be liable for local VAT'.

Nicole König
 

Gareth Callagy
United Kingdom
Local time: 09:22
Member (2018)
French to English
+ ...
Yes, non-VAT registered entities can't charge VAT Mar 7

You're right, only VAT registered entities can charge VAT.

The VAT registration threshold in some EU countries can be quite low so some EU clients might expect freelancers and small companies to be VAT registered. Therefore, you sometimes will need to explain (or include a statement on your invoice) that as you are below the UK VAT threshold of £85,000 you are not required to register for VAT and cannot charge VAT as a result.

If you were VAT-registered and your NL cu
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You're right, only VAT registered entities can charge VAT.

The VAT registration threshold in some EU countries can be quite low so some EU clients might expect freelancers and small companies to be VAT registered. Therefore, you sometimes will need to explain (or include a statement on your invoice) that as you are below the UK VAT threshold of £85,000 you are not required to register for VAT and cannot charge VAT as a result.

If you were VAT-registered and your NL customer is also VAT registered, the VAT would be "reverse charged" - you would include VAT of £0.00 on your invoice and the customer would account for the VAT at their local rate on their VAT return (by adding it then reclaiming it in the same quarter with a net result of €0,00)
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Nicole König
 

Hanneke Kroes
United Kingdom
Local time: 09:22
Member (Jan 2019)
English to Dutch
+ ...
TOPIC STARTER
Thanks! Mar 8

Thanks Helen and Gareth - that's very helpful!

I've been reading up a good bit but it's great to have a community like this


 

Kay Denney  Identity Verified
France
Local time: 10:22
Member (2018)
French to English
confirm Mar 8

I can confirm, you don't need to pay VAT. The threshold is higher in the UK than in France, so maybe than in NL too. I remember, as a PM, having to ask my translators for their VAT number and none of the Brits had one. My boss was convinced I was sending work to people working illegally until I found that out!

Angie Garbarino
 

Nicole König  Identity Verified
Germany
Local time: 10:22
German to English
+ ...
More info on the web (DE) Mar 12

I love your question, and it is one that keeps popping up. So, you're not alone having to learn the VAT ropes while similarily educating clients.

Our Colleague Neil Coffey phrased it excellently, maybe you could explain it to your client that way?
https://www.proz.com/f
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I love your question, and it is one that keeps popping up. So, you're not alone having to learn the VAT ropes while similarily educating clients.

Our Colleague Neil Coffey phrased it excellently, maybe you could explain it to your client that way?
https://www.proz.com/forum/translation_in_the_uk/183104-charging_vat_when_invoicing.html

Also, to get you more comfortable with the whole topic, some great resources:

https://rachelandrew.co.uk/archives/2014/10/13/the-horrible-implications-of-the-eu-vat-place-of-supply-change/

https://www.gov.uk/vat-businesses

https://www.pwc.co.uk/ux23/guides-templates-insights/short-guide-international-vat.html

https://ec.europa.eu/taxation_customs/business/vat/eu-vat-rules-topic/vat-invoicing-rules_en

https://transferwise.com/gb/blog/invoicing-eu-customers-as-uk-business

And a great read that comes with downloadable invoice templates:

https://mbharris.co.uk/articles/finance/eurovat/
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Jan Willem van Dormolen  Identity Verified
Netherlands
Local time: 10:22
English to Dutch
+ ...
No threshold in NL Mar 12

In the Netherlands, there is no treshold for the VAT. Also, in many other EU countries, there is no threshold or it is so low that it is practically non-existent. Therefore, Dutch people can be quite unaware that in the UK, things are different.
Since you are below the treshold, you "count" as a private customer. Therefore, you don't charge VAT to other companies in other EU countries - but others may (actually, must) charge you VAT if they deliver goods/services to you!

Norma
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In the Netherlands, there is no treshold for the VAT. Also, in many other EU countries, there is no threshold or it is so low that it is practically non-existent. Therefore, Dutch people can be quite unaware that in the UK, things are different.
Since you are below the treshold, you "count" as a private customer. Therefore, you don't charge VAT to other companies in other EU countries - but others may (actually, must) charge you VAT if they deliver goods/services to you!

Normally, I would add a paragraph on what happens when you'll pass the threshold, but since the UK will be leaving the EU within a short while, that will quickly become moot.
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Hanneke Kroes
United Kingdom
Local time: 09:22
Member (Jan 2019)
English to Dutch
+ ...
TOPIC STARTER
https://www.proz.com/forum/translation_in_the_uk/183104-charging_vat_when_invoicing.html Mar 12

Jan Willem, Nicole & Kay:

Thanks for your replies! Good to get this confirmed and I'll definitely have a browse through the links you mentioned. At first glance, this explained it perfectly:

https://www.proz.com/forum/translation_in_the_uk/183104-charging_vat_when_invoicing.html


Kay Denney
 


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