Self employed with earnings from overseas

woodformoretrees

Hi,

I would appreciate any pointers that any of you may have with regards to being self employed, based solely in the UK and work from the UK, with with clients who are based overseas sending me work.

I obviously declare all income on my S/A form, but this year I have had several clients who have moved to overseas companies but still keep sending work my way. This is purely secretarial services, and does not involve 'goods' as such. All invoices are for £GBP and paid into my UK bank account.

I am very grateful for the work, but I'm trying to see what I need to do with regards this income over and above it just being part of my normal UK earned SA income.

Any thoughts on this would be hugely welcome.
Thank you in advance.

Savvy_Sue

I am not an expert but I think you're overthinking this ...

You're based in the UK.

You do the work in the UK.

You invoice the client in UK£.

The client pays into your UK£ bank account.

For your personal UK tax purposes, who cares where your client is based?

If I'm wrong, someone will say so!

TheCyclingProgrammer

Savvy_Sue wrote: »

I am not an expert but I think you're overthinking this ...

You're based in the UK.

You do the work in the UK.

You invoice the client in UK£.

The client pays into your UK£ bank account.

For your personal UK tax purposes, who cares where your client is based?

If I'm wrong, someone will say so!

Also not an expert, just somebody who runs his own business (Ltd company, not self-employed) and deals with foreign clients. Agree with all the above - things only become complicated with tax and foreign clients when you're actually working overseas.

Its all UK income and taxed in the UK. It doesn't matter whether you're invoicing in sterling or your clients currency or not either, as far as income tax is concerned (although if invoicing in sterling and receiving payments in foreign currency you may need to keep track of any gains/losses made due to exchange rate changes).

If you are VAT registered, then there is a bit more to it as you have to consider the place of supply and whether or not UK VAT should be charged but as OP didn't mention VAT I'm assuming they aren't VAT registered.

woodformoretrees

Brilliant, thank you both
No, VAT is not an issue, I'm trading well below the threshold.

TheCyclingProgrammer

woodformoretrees wrote: »

Brilliant, thank you both
No, VAT is not an issue, I'm trading well below the threshold.

Just remember if you're making purchases of services from outside the UK that you would normally have to apply the reverse charge to if VAT registered, that these would count towards your VAT taxable turnover for the purposes of the registration threshold.

Probably not an issue but worth mentioning.

woodformoretrees

TheCyclingProgrammer wrote: »

Just remember if you're making purchases of services from outside the UK that you would normally have to apply the reverse charge to if VAT registered, that these would count towards your VAT taxable turnover for the purposes of the registration threshold.

Probably not an issue but worth mentioning.

Okay, you have completely lost me now (my idiocy, not your information).
I do buy services (secretarial) from outside of UK, but from another sole trader and neither of us is VAT registered. I'm guessing that just comes under the 'carry on as normal' advice?

TheCyclingProgrammer

woodformoretrees wrote: »

Okay, you have completely lost me now (my idiocy, not your information).
I do buy services (secretarial) from outside of UK, but from another sole trader and neither of us is VAT registered. I'm guessing that just comes under the 'carry on as normal' advice?

The supplier's VAT registration isn't relevant (the reverse charge applies to any overseas supplies of services including suppliers outside the EU who probably wouldn't be registered for EU VAT either).

You would have to check the place of supply rules but if it falls under the general rule (where a B2B supply of services is deemed as being supplied where the customer belongs) and the services are deemed as supplied in the UK, then if VAT registered you have to apply the reverse charge.

You're not VAT registered, so have nothing to report, but you still need to treat the supply as if it was a sale you made and part of your VAT taxable turnover.

See:
http://www.hmrc.gov.uk/manuals/vatpossmanual/vatposs14700.htm

PBrail

Hmm, this is interesting. Sorry to hi-jack your thread.

I have just registered as self employed, I am British and physically live and do all my work in the UK (online). I have entered an agreement with a US Travel Agency as an 'independent agent' - this basically means the Travel Agency sends me potential clients and then it's up to me to quote their requested vacation, and 'service' them until time of travel if they decide to go on and book.

Payment is commission from the suppliers (i.e. the hotels, cruise lines etc where people stay) which is paid to me via the agency after they have deducted their cut (For both sending me the lead and also providing the relevant consumer protection umbrella that Travel Agencies need in relation to IATA etc).

I was told that as I would be paid in US Dollars that I would have to submit a tax return to the IRS in the States as well as one here to HMRC - though I would only have to actually pay tax here due to the Double Taxation agreement between the 2 countries.

The comments above lead me to believe this is not the case though?