UK client says we need to charge VAT
Jan 6th 2021, 3:18 am
#1
No beginning to my talent
Thread Starter
Joined: Dec 2017
Location: Hamilton, Ontario
Posts: 357
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?
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?
Jan 6th 2021, 5:15 am
#2
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Joined: Apr 2009
Location: SW Ontario
Posts: 19,879
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.
Hopefully others who have overseas clients can be of help.
Jan 9th 2021, 9:31 pm
#3
limey party pooper
Joined: Jul 2012
Posts: 9,982
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
https://www.gov.uk/government/public...1-january-2021
Jan 9th 2021, 9:40 pm
#4
Banned
Joined: Apr 2009
Location: SW Ontario
Posts: 19,879
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
https://www.gov.uk/government/public...1-january-2021
Jan 10th 2021, 12:39 am
#5
limey party pooper
Joined: Jul 2012
Posts: 9,982
Re: UK client says we need to charge VAT
"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.
Jan 10th 2021, 1:47 am
#6
Banned
Joined: Apr 2009
Location: SW Ontario
Posts: 19,879
Re: UK client says we need to charge VAT
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.
"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.
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!
Jan 10th 2021, 10:10 pm
#7
limey party pooper
Joined: Jul 2012
Posts: 9,982
Re: UK client says we need to charge VAT
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!
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!
Jan 12th 2021, 5:39 pm
#8
No beginning to my talent
Thread Starter
Joined: Dec 2017
Location: Hamilton, Ontario
Posts: 357
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.
Hopefully others who have overseas clients can be of help.
