Foreign client requires VAT number?

ClaraSolis

Sorry if this isn't the correct board to post this!

I am a freelance translator, registered as self-employed. I work with a variety of clients and agencies and invoice them directly. 

However I also do quite a bit of work for a Danish company. At the moment they pay me through a freelancer platform, where of course they have to pay commission every time they pay me, and I have to pay a portion of my income to the platform as well. 

They have asked if we can start invoicing off the platform, but they require a VAT number for this. As I am not VAT registered (I don't earn anywhere near the £85,000 you need to earn), I am unable to give them a number of course. 

Is there any way around this? I don't know too much about VAT and registering to be honest. But I am wary of voluntarily registering for VAT as I imagine it will complicate things?

Any advice would be appreciated. Thank you.

tightauldgit

I believe the way around it would be to tell them you aren't VAT registered and wouldn't be invoicing them for VAT - its up to them if they are happy with that arrangement

It certainly wouldn't make sense to register for VAT as you'd have to increase your prices to cover it or take a hit on 20% of your income. 

When you say you are a freelancer translator I assume you mean you translate documents etc and do your work here in the UK?

ClaraSolis

tightauldgit said:

I believe the way around it would be to tell them you aren't VAT registered and wouldn't be invoicing them for VAT - its up to them if they are happy with that arrangement

It certainly wouldn't make sense to register for VAT as you'd have to increase your prices to cover it or take a hit on 20% of your income. 

When you say you are a freelancer translator I assume you mean you translate documents etc and do your work here in the UK?

Thanks for your reply. 

Yes, I live and work in the UK, though my clients are mostly from outside of the UK. I've simply been invoicing them and then paid whatever I owed HMRC. I am fairly new to this though and only submitted my tax return for 1 year so far. 

I told them before that I am not VAT registered, but they claim that in Denmark they need a VAT number to be able to work directly with a freelancer. So the way around this has been to work through the freelancer platform. 

I don't want to lose this client as my main income is through them, and I've been struggling as it is. But registering for VAT makes no sense I think. 

DullGreyGuy

tightauldgit said:

It certainly wouldn't make sense to register for VAT as you'd have to increase your prices to cover it or take a hit on 20% of your income. 

When you say you are a freelancer translator I assume you mean you translate documents etc and do your work here in the UK?

If it makes sense to register depends on the nature of the OP's clients are and where the services are deemed to be carried out. If all the clients are VAT registered companies then they are interested in the net price not the price inclusive of VAT... VAT is just a cashflow mater. 

Supply of services internationally is more complex than the sale of goods. Who's VAT is chargeable depends on where the place of supply is considered to be and for B2B sales the general principle is that its where the customer is based. As such they are outside the scope of UK VAT and the OP would need to look at the tax law of the country of supply. 

In Denmark it appears services deemed to be supplied there by businesses outside of Denmark then its the receiving company that has to account for the supply VAT and not the overseas business so the OP would sell the services net priced

ClaraSolis said:

tightauldgit said:

I believe the way around it would be to tell them you aren't VAT registered and wouldn't be invoicing them for VAT - its up to them if they are happy with that arrangement

It certainly wouldn't make sense to register for VAT as you'd have to increase your prices to cover it or take a hit on 20% of your income. 

When you say you are a freelancer translator I assume you mean you translate documents etc and do your work here in the UK?

Thanks for your reply. 

Yes, I live and work in the UK, though my clients are mostly from outside of the UK. I've simply been invoicing them and then paid whatever I owed HMRC. I am fairly new to this though and only submitted my tax return for 1 year so far. 

I told them before that I am not VAT registered, but they claim that in Denmark they need a VAT number to be able to work directly with a freelancer. So the way around this has been to work through the freelancer platform. 

I don't want to lose this client as my main income is through them, and I've been struggling as it is. But registering for VAT makes no sense I think. 

VAT registration will depend on who your customers are. There can be good reasons to do voluntary registration but VAT on services is more complex than products and I suspect your own costs are minimal and so not much VAT to recover.

J_B

How about just a load of zeros?

martindow

J_B said:

How about just a load of zeros?

Hmm, that might work until they check it out

https://www.gov.uk/check-uk-vat-number

Mistral001

 Could you set up a separate company and register it for VAT specifically for supplying services to the EU and the EU only? This could mean that you can  continue supplying your UK cleints with services, without charging VAT.

penners324

Without a UK VAT number you could find yourself liable to paying Danish VAT (25% I think), issuing a Danish VAT submission etc. Vastly more complex to do as a foreign individual....