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UK client says we need to charge VAT

UK client says we need to charge VAT

Old Jan 6th 2021, 3:18 am
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Default UK client says we need to charge VAT

We moved to Canada last year and my wife is a graphic designer working remotely for UK clients. Her main client, for some reason, insists that all of their freelancers are VAT registered, regardless of whether they are under the threshold, which she is.

As she is not a UK resident she can't legally charge VAT anymore but the company are being really stubborn and just say that it's their policy. Obviously she wants to keep the relationship because it's her main source of income, while staying within the law.

Has anybody else ever had a client insist on you charging VAT when you're not tax resident, and if so did you manage to get round it?
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Old Jan 6th 2021, 5:15 am
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Default Re: UK client says we need to charge VAT

I suggest that she register herself as a business and invoice the company concerned - she doesn't work for them if she is a freelance contractor and they shouldn't be dictating how they are invoiced - they just want to be able to claim VAT back. She can/should invoice them at 0% GST/HST as they are an overseas client and she is providing a service and not goods... if they absolutely insist then perhaps she could invoice them at 0% (zero rated) VAT as there is no VAT liability on services supplied from overseas.

Hopefully others who have overseas clients can be of help.
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Old Jan 9th 2021, 9:31 pm
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Default Re: UK client says we need to charge VAT

Vat rules have changed very recently and sellers to the UK are expected to collect VAT. Seems nonsense to me but its a Brexit thing. I only know of it cos William Shatner said he isn't selling mercy to the UK because of this

https://www.gov.uk/government/public...1-january-2021
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Old Jan 9th 2021, 9:40 pm
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Default Re: UK client says we need to charge VAT

Originally Posted by bats View Post
Vat rules have changed very recently and sellers to the UK are expected to collect VAT. Seems nonsense to me but its a Brexit thing. I only know of it cos William Shatner said he isn't selling mercy to the UK because of this

https://www.gov.uk/government/public...1-january-2021
Selling goods and providing services from overseas are normally treated differently
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Old Jan 10th 2021, 12:39 am
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Default Re: UK client says we need to charge VAT

Originally Posted by Siouxie View Post
Selling goods and providing services from overseas are normally treated differently
it's complicated of course
"For goods sent from overseas and sold directly to UK consumers without OMP involvement, the overseas seller will be required to register and account for the VAT to HMRC"
For imports of goods from outside the UK in consignments not exceeding £135 in value (which aligns with the threshold for customs duty liability), we will be moving the point at which VAT is collected from the point of importation to the point of sale. This will mean that UK supply VAT, rather than import VAT, will be due on these consignments.

Last edited by bats; Jan 10th 2021 at 12:48 am.
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Old Jan 10th 2021, 1:47 am
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Default Re: UK client says we need to charge VAT

Originally Posted by bats View Post
it's complicated of course
"For goods sent from overseas and sold directly to UK consumers without OMP involvement, the overseas seller will be required to register and account for the VAT to HMRC"
For imports of goods from outside the UK in consignments not exceeding £135 in value (which aligns with the threshold for customs duty liability), we will be moving the point at which VAT is collected from the point of importation to the point of sale. This will mean that UK supply VAT, rather than import VAT, will be due on these consignments.
That refers to Goods being sold - not providing a Service (which I believe is what the OP is asking about - they work remotely, as I do).
For example.. I have provided an intangible service to overseas clients - including UK clients so there are no physical goods and no point of sale - different to someone selling framed prints or knitted cardigans etc., for instance. If the OP actually provides physical goods then they may have to register for VAT, as you suggest..
Complex, for sure!
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Old Jan 10th 2021, 10:10 pm
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Default Re: UK client says we need to charge VAT

Originally Posted by Siouxie View Post
That refers to Goods being sold - not providing a Service (which I believe is what the OP is asking about - they work remotely, as I do).
For example.. I have provided an intangible service to overseas clients - including UK clients so there are no physical goods and no point of sale - different to someone selling framed prints or knitted cardigans etc., for instance. If the OP actually provides physical goods then they may have to register for VAT, as you suggest..
Complex, for sure!
oh, ok. I thought she was selling art work
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Old Jan 12th 2021, 5:39 pm
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Default Re: UK client says we need to charge VAT

Originally Posted by Siouxie View Post
I suggest that she register herself as a business and invoice the company concerned - she doesn't work for them if she is a freelance contractor and they shouldn't be dictating how they are invoiced - they just want to be able to claim VAT back. She can/should invoice them at 0% GST/HST as they are an overseas client and she is providing a service and not goods... if they absolutely insist then perhaps she could invoice them at 0% (zero rated) VAT as there is no VAT liability on services supplied from overseas.

Hopefully others who have overseas clients can be of help.
Thanks Siouxie, looks like they're being a bit more flexible now so hopefully they've taken note of the rules.
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