UK Invoicing but EU resident

[Florac]

I am trying to find out if I can invoice in the UK (no VAT as under threshold) although I am an EU resident. I do not want a VAT number in Italy but need to invoice private individuals and two or three UK companies, I hope. I would want to pay the tax involved in the UK. Advice and suggestions welcomed.

 

[GraemeL]

I am trying to find out if I can invoice in the UK (no VAT as under threshold) although I am an EU resident. I do not want a VAT number in Italy but need to invoice private individuals and two or three UK companies, I hope. I would want to pay the tax involved in the UK. Advice and suggestions welcomed.

Hello Florac,

I am not an expert on this, but I do not think you have given enough information so that an expert can answer.

You are in Italy? You want to invoice people who live in the UK and also businesses in the UK?

So what is it you are worried about? Why not just invoice them?

G

 

[Florac]

Thanks for replying G, well in Italy to invoice private individuals you have to have a VAT number which is quite expensive. At the moment I send the UK people a note and they pay me in the UK but I would like to do it correctly, especially if I start getting more UK customers. I am thinking of taking out a VAT number in Italy for next year but in the mean time.......

 

[GraemeL]

In the UK, unless the annual sales of your business are over about GB£70,000, you do not need to register for VAT. You can invoice businesses or private individuals in the UK and you do not charge them VAT.

My only invoices that are outside the UK are to Taiwan, who are definitely not members of the EC! My sales are over £70,000 so I am VAT registered. But I still do not charge them VAT.

Is that any help to you?

 

[Florac]

Thanks for your patience. What I realise now - thanks to your replies too - is that what I want to do is carry on invoicing companies in Italy who want my services, and then separately invoice and pay tax on a company or individual who pays me in sterling in the UK. I am pretty sure I cannot do this as an individual, so what I am going to do is check out yet another accountant to see if I can simply present a bill to an individual and then pay the tax on it when I present my tax declaration in Italy.They usually say no and tell me to take out a VAT number. Thank you anyway, I will see what I can organise over here, reluctantly.

 

[GraemeL]

I want to do is carry on invoicing companies in Italy who want my services, and then separately invoice and pay tax on a company or individual who pays me in sterling in the UK. .

Could you set up two distinct businesses? Each could then trade as liked?

But whatever - good luck!

 

[Florac]

thanks, I am going to look into this solution, it sounds sensible. Flora

 

[Enterway]

Hi

I work in Accounting in the UK and could be able to clarify some issues for you. If your business is registered in the UK it would be subject to UK tax laws. You will need to register the company with companies house to ensure that it can legally operate in the UK. You will also be subject to corporation tax upon making transactions within the UK market. VAT is not applicable as your business does not meet the threshold. You will also need to do annual returns, Statutory accounts on your business which will help HMRC identify the level of tax you have payable and in some cases you can get returns on taxes.

I hope that was helpful in deciding if you want to set up a separate business in the UK.

 

[Florac]

Thank you very much, it is helpful. I have been talking to a client who has set up a separate company in the UK too. What I need to look is, after invoicing the clients, how to make payments to myself for the work without breaking any laws - the Italian ones in particular are always over the top!

 

[Enterway]

There are many ways to set up in the UK a new business. With regards to yourself you may decide to set up either as a sole trader or as a limited liability company. If you decide to go with either one you have the right to set up your own wages at the rate you feel is applicable. However, one thing to consider is that as a company you will need to make corporate ta on earning made under the company as well as pay your national insurance contribution. There is a system for payroll called the PAYE which is under a system of [pay as you earn]. This means that if you decide to set up your salary, you will be subjected to a particular threshold on your income. Have a look at HMRC website which has a variety of information about wages and payments particularly for company directors which is slightly different to normal employees

 

[BLintl.]

If you set up a company in Gibraltar you can invoice your EU customers without VAT. Gibraltar is in the EU but does not have any VAT.

 

[Florac]

Well Gibraltar sounds interesting too. Thks

 

[ReallyWildOne]

Hi Flora,

You can have a company in the UK, not registered for VAT (Since you are under the threshold), and invoice clients through the company. You will need to pay corporation tax on the profits, but these are lower than Italy.

Also, in terms of paying yourself, you can pay yourself just over £7,000 per year without having to pay any NI or income tax in the UK. If you pay yourself dividends, then you can save even more. I can recommend a book (printed or online PDF) that explains this in detail, but you'll need to PM me for this, as I can't post links on the forum yet.

It would also be a wise move to use accountants in the UK. I am currently using accountants that specialise in small businesses. They cost half of what most accountants charge, and their entire system is online. Can send you details if this is of interest.

Hope this helps

 

[Florac]

Right, so I look at the HMRC website, see about setting up the company and giving myself some sort of payment - possibly dividends, an online small business accountant. I would like to read the pdf of the book you recommend and will try to PM you on that. Thanks a lot

 

[GraemeL]

Hello again Florac,

The book may give the answers! But strongly suggest the use of experts to advise you if you intend to trade from bases in two countries. It may all be easy and straightforward, or it may not. I really dont know. But I have heard of terrible tales of being taxed by both countries etc etc so take care!