Advice needed on charging VAT as non VAT-registered sole trader

Discussion in 'Accounts & Finance' started by Julian Westwood, Feb 13, 2020.

  1. Julian Westwood

    Julian Westwood UKBF Newcomer Free Member

    2 0
    Hi,
    I've been asked to undertake some freelance market research work which I am doing as a sole trader.
    The total value of the work is circa £15k and while I hope for further work later I'm well below the VAT threshold.

    I'm unclear about VAT.
    The org I am doing the work for are a charity and VAT registered.
    Is VAT chargeable on the work I'm doing?
    Do I include a charge for VAT when I invoice?
    Do I then hold that money for when I pay my tax?

    Advice much appreciated.
     
    Posted: Feb 13, 2020 By: Julian Westwood Member since: Feb 13, 2020
    #1
  2. MBE2017

    MBE2017 UKBF Ace Free Member

    1,247 347
    If you are not VAT registered then you do not charge it.
     
    Posted: Feb 13, 2020 By: MBE2017 Member since: Feb 16, 2017
    #2
  3. spidersong

    spidersong UKBF Newcomer Free Member

    281 109
    If you are not VAT registered then you cannot charge VAT. If you put a VAT charge on your invoice then it would be fraudulent.

    You only charge (and then pay over VAT to HMRC) if you are VAT registered, and you only need to be VAT registered once your taxable turnover in the UK is above £85K in a rolling 12 month period. Not a particular tax or calendar year but any 12 month period e.g. look at it for May to April, then for June to May etc. throughout the year.

    The fact you're working for a charity is largely irrelevant, if you were VAT registered then you would need to charge them VAT (no matter what they might think, most charities don't understand VAT) apart from on a small number of types of goods or services, of which market research would not be one.

    So when working out what to charge them remember to take into account the fact that you will be charged VAT by your suppliers on your costs, and that you won't be able to recover this so you should set charges high enough to cover this.
     
    Posted: Feb 13, 2020 By: spidersong Member since: Aug 20, 2008
    #3
  4. Julian Westwood

    Julian Westwood UKBF Newcomer Free Member

    2 0

    That's great thank you.
     
    Posted: Feb 13, 2020 By: Julian Westwood Member since: Feb 13, 2020
    #4
  5. MyAccountantOnline

    MyAccountantOnline UKBF Legend Full Member

    12,943 2,406
    @Julian Westwood if you generally work for VAT registered clients have you considered making a voluntary VAT registration? It'll enable you to recover VAT on your costs.
     
    Posted: Feb 13, 2020 By: MyAccountantOnline Member since: Sep 24, 2008
    #5
  6. Green Image Sailflags

    Green Image Sailflags UKBF Newcomer Free Member

    8 1
    If you are doing any kind of consultancy work (where you are just charging for your time and nothing else) and you are below the VAT threshold, it's never worth making a voluntary registration.
     
    Posted: Feb 13, 2020 By: Green Image Sailflags Member since: Feb 5, 2020
    #6
  7. MyAccountantOnline

    MyAccountantOnline UKBF Legend Full Member

    12,943 2,406
    I disagree.

    It enables you to recover the VAT you incur on your business costs such as phone costs, stationery , equipment, professional fees etc.
     
    Posted: Feb 13, 2020 By: MyAccountantOnline Member since: Sep 24, 2008
    #7
  8. Ahmed Sayeed

    Ahmed Sayeed UKBF Newcomer Free Member

    14 0
    Taxes for consultancy is little tricky. I prefer to get in touch with tax offices.
     
    Posted: Feb 13, 2020 By: Ahmed Sayeed Member since: Feb 13, 2020
    #8
  9. Ahmed Sayeed

    Ahmed Sayeed UKBF Newcomer Free Member

    14 0
    Also thanks for all your comments
     
    Posted: Feb 13, 2020 By: Ahmed Sayeed Member since: Feb 13, 2020
    #9
  10. SteLacca

    SteLacca UKBF Ace Free Member

    1,598 317
    Wow. HMRC are the last people I'd ask for advice about tax.
     
    Posted: Feb 14, 2020 By: SteLacca Member since: Jun 16, 2016
    #10
  11. Argentum Tax

    Argentum Tax UKBF Contributor Free Member

    40 10
    Exactly what I was thinking! Oh well......
     
    Posted: Feb 14, 2020 By: Argentum Tax Member since: Aug 24, 2015
    #11
  12. MyAccountantOnline

    MyAccountantOnline UKBF Legend Full Member

    12,943 2,406
    HMRC aren't there to give tax advice.
     
    Posted: Feb 14, 2020 By: MyAccountantOnline Member since: Sep 24, 2008
    #12
  13. Ahmed Sayeed

    Ahmed Sayeed UKBF Newcomer Free Member

    14 0
    My problem is I give service to turkish company to sell their products. And they pay me for my service. So should I pay VAT here?
     
    Posted: Feb 14, 2020 By: Ahmed Sayeed Member since: Feb 13, 2020
    #13
  14. Ahmed Sayeed

    Ahmed Sayeed UKBF Newcomer Free Member

    14 0
    I don't buy and sell products. They sell straight to customer. I just send invoice turkish company as 5% of their sales.
     
    Posted: Feb 14, 2020 By: Ahmed Sayeed Member since: Feb 13, 2020
    #14
  15. TheCyclingProgrammer

    TheCyclingProgrammer UKBF Regular Free Member

    1,192 239
    You’ve already started a thread about this. Please don’t hijack other people’s threads.
     
    Posted: Feb 14, 2020 By: TheCyclingProgrammer Member since: Jul 15, 2014
    #15