Sole Trader / NO VAT / Invoice in Euros / Accounts / Online Classes / Training ONLY

authorleon

I have a few questions about how to manage my situation post Brexit.

I will also be looking for an accountant as well.

Facts (Even if they are obvious):

1.       I am a UK citizen, born and bred

2.       I want to be a sole trader at first

3.       I want to start 6th April 2021 as that is the start of the fiscal year (I think). I understand there needs to be pre-preparation, bank account, HMRC etc...

4.       My websites will be setup to accept Euros as I have international clients and from my research, they prefer to see everything in Euros.

5.       I will be using stripe as my payment gateway.

6.       I offer the following services:

a.       Online training classes

b.       Online IT support and training

c.       Future goals

                                                               i.      Sell online courses + workshops. Complete package

d.       We have no physical products.

7.       I will be using WooCommerce to generate all the invoices. This gives me a level of flexibility as I can customise the invoices as I want and need as well as to comply with whatever regulations.

a.       I will generate invoices for those who will do a bank transfer.

b.       I will accept online payments via credit card and debit card which is pretty much automated.

Questions:

1.       The invoice will obviously show the total amount in Euros. What information do I have to show on the invoice?

a.       My address. Mandatory

b.       Their address? (This is an interesting one because I have seen some companies that only show the email and not the client’s address.

c.       Euro Total?

d.       Conversion amount?

e.       GBP Conversion total e.g.

                                                               i.      Total 100 Euros

                                                             ii.      GBP Total £92.30

 

2.       As I offer two different services, I will have two different websites.

a.       Can I have the following invoice numbering system?

                                                               i.      Company A: COMP-A-0001

                                                             ii.      Company B: COMP-B-0001

b.       This means at the end of the month I would provide two sets of invoices. Of course, the payment will go through this same stripe account as well as bank transfers will go to the same sole trader account.

 

3.       Traveling

a.       From time to time, I will be obligated to travel to certain countries to meet companies as well as individual clients.

                                                               i.      I would like to know what kind of expenses are allowed?

Accountant

Can anyone recommend a cheap and reliable accountant? Someone I can communicate online as well as answer all my doubts/questions which I will have quite a few in the first month. But after getting into a routine, it will only be the odd question here and there.

Feel free to PM me.

I am sure that I have definitely forgotten a few is why I need to get an accountant that has pretty sharp communicative skills.

CKhalvashi

If you're invoicing and billing in Euro, you won't need to include any conversion amounts.

Your invoice numbering system looks fine.

It may be worth even getting a free Euro account set up with Wise, which you can then transfer the money to a GBP account at your bank. Getting 2 payments to Ukraine last week took around 5 seconds from authorisation to arriving from bank to bank (HSBC-Privatbank), so I'd imagine EU-UK will take around the same time. Stipe then aren't doing any conversions, so you'll get a near clean rate.

For travel, you can claim any business expenses. These are usually travel to the airport/parking, flights, accommodation, transport at destination and meals while away. When away on business I tend to find an apartment for cooking facilities on a local website unless I know of a sub-£30/night hotel that's decent (I have a list of these in several cities throughout Eastern Europe), however a supermarket shop is not claimable. My expenses for food generally amount to less than £10/day on average when I'm away for work.

For accountants, ask on a local Facebook page. I use an accountant in the town next to the one I live in, who charge around £150 to check a personal tax return before I personally submit to HMRC. I log on a spreadsheet for income/expenses. Yours will likely be a little more as you're self-employed and I'm not.

authorleon

CKhalvashi said:

If you're invoicing and billing in Euro, you won't need to include any conversion amounts.

Your invoice numbering system looks fine.

It may be worth even getting a free Euro account set up with Wise, which you can then transfer the money to a GBP account at your bank. Getting 2 payments to Ukraine last week took around 5 seconds from authorisation to arriving from bank to bank (HSBC-Privatbank), so I'd imagine EU-UK will take around the same time. Stipe then aren't doing any conversions, so you'll get a near clean rate.

For travel, you can claim any business expenses. These are usually travel to the airport/parking, flights, accommodation, transport at destination and meals while away. When away on business I tend to find an apartment for cooking facilities on a local website unless I know of a sub-£30/night hotel that's decent (I have a list of these in several cities throughout Eastern Europe), however a supermarket shop is not claimable. My expenses for food generally amount to less than £10/day on average when I'm away for work.

For accountants, ask on a local Facebook page. I use an accountant in the town next to the one I live in, who charge around £150 to check a personal tax return before I personally submit to HMRC. I log on a spreadsheet for income/expenses. Yours will likely be a little more as you're self-employed and I'm not.

Thank you very much for your reply I'd really do appreciate it.... 
I have a question if I may. So does that mean every month you give the spreadsheet and all the information to your accountant to make sure that it's done or is it done every quarterly. I assume that the personal tax return is submitted to the HMRC on yearly basis as I will be a sole trader. If you can recommend any Facebook pages I would greatly appreciate it. 

CKhalvashi

For local Facebook groups, simply search your town name in Facebook, and you should be able to find a local group to you. A number of local businesses and their owners are active in my local groups and help finding a local company to you can be sought in this way. A local group to me probably isn't going to help you.

I give a spreadsheet of all income (with relevant dates), plus any expenses received through the year with a brief description for a quick check. I do have receipts, but as I must claim expenses accurately to remain in accordance with the law, these do not need to be shown and are assumed to be accurate.

The sole purpose for me is to ensure that everything is a genuine expense, and therefore anything I'm not 100% sure of the allocation for tax is flagged at this stage.

As already stated, I am not self-employed and haven't had any income outside of limited companies for a number of years.

penners324

It's very likely you'll have to charge VAT to your customers in the EU at the rate of VAT in your customer's country and pay this to that country's VAT office.

CKhalvashi

penners324 said:

It's very likely you'll have to charge VAT to your customers in the EU at the rate of VAT in your customer's country and pay this to that country's VAT office.

That is correct, and is a point that I should have mentioned but overlooked as (to me) it's basic stuff.

The EU has a very useful guide on this (click here).

authorleon

penners324 said:

It's very likely you'll have to charge VAT to your customers in the EU at the rate of VAT in your customer's country and pay this to that country's VAT office.

Well I have investigated one country for example Spain where they do not charge VAT for training classes online. Of course I'm referring to live training classes and not purchasable digital products on a website. 

authorleon

CKhalvashi said:

penners324 said:

It's very likely you'll have to charge VAT to your customers in the EU at the rate of VAT in your customer's country and pay this to that country's VAT office.

That is correct, and is a point that I should have mentioned but overlooked as (to me) it's basic stuff.

The EU has a very useful guide on this (click

That link is very useful... Thank you very much. A virtual beer for you. 

authorleon

okay I'm going to use Spain as an example.
Spain does not charge any VAT for online training/language training and effectively any online training.


so am I correct in assuming that I can provide training online and I would only have to potentially register for MOSS if I own more than the threshold but in this case. I would still pay zero VAT as I will not charge VAT UK and Spain does not require VAT for online training?

CKhalvashi

authorleon said:

okay I'm going to use Spain as an example.
Spain does not charge any VAT for online training/language training and effectively any online training.


so am I correct in assuming that I can provide training online and I would only have to potentially register for MOSS if I own more than the threshold but in this case. I would still pay zero VAT as I will not charge VAT UK and Spain does not require VAT for online training?

This would be a question for the accountant, however as far as I'm aware you would have to be registered in any event for supplies into the EU in any event. Previously an exemption of €10,000 was applied, but this is no longer the case.

You have until the 10th of the month after the services were supplied to register.

Spain's VAT treatment of this is irrelevant, however it will impact the VAT rate paid.

authorleon

CKhalvashi said:

authorleon said:

okay I'm going to use Spain as an example.
Spain does not charge any VAT for online training/language training and effectively any online training.


so am I correct in assuming that I can provide training online and I would only have to potentially register for MOSS if I own more than the threshold but in this case. I would still pay zero VAT as I will not charge VAT UK and Spain does not require VAT for online training?

This would be a question for the accountant, however as far as I'm aware you would have to be registered in any event for supplies into the EU in any event. Previously an exemption of €10,000 was applied, but this is no longer the case.

You have until the 10th of the month after the services were supplied to register.

Spain's VAT treatment of this is irrelevant, however it will impact the VAT rate paid.

Thank you for the information. I will keep you fully updated.
if anyone is aware of any decent tax/VAT advisers as well as an accountant I would greatly appreciate it. Feel free to PM me.