Moved to UK, trying to send invoices to EU

[jkgeyti]

Dear fellow contractors ,

Background:

I moved to UK a year and a half ago, and have just signed up for Self Assessment because I'm doing a bit of contracting work for a few companies in Denmark (EU). It's very limited amounts of work (<£2000) , and something I'm doing while fully employed (PAYE), so I've signed up for a Small Earnings Exception.

Question regarding VAT and Invoicing

I can't wrap my head around how I should charge a company in another EU country, what the invoice should contain (especially regarding VAT), and where to actually read up on this stuff!

Any pointers would be accepted enthusiastically

[borderreiver]

Are you registered for VAT yourself? That's the most important question. For a turnover of £2000 it isn't worth the bother registering IMHO.

If you are, you can zero rate the supply if your invoices have the necessary information on them. If not, you can't, obviously.

[TheCyclingProgrammer]

If you are, you can zero rate the supply if your invoices have the necessary information on them. If not, you can't, obviously.

They would be outside the scope of UK VAT, not zero rated. You wouldn't even include a VAT line on the invoice. Client should account for VAT under reverse charge rules.

There are some exceptions to the above rule depending on where certain services are used and enjoyed but that's he general rule.

Obviously this only applies at all if OP is VAT registered.

[borderreiver]

They would be outside the scope of UK VAT, not zero rated. You wouldn't even include a VAT line on the invoice. Client should account for VAT under reverse charge rules.

That's what I meant.

[dty]

That's what I meant.

Then try and be more careful! Zero rated and outside scope are very different things.

[jkgeyti]

Nope, I'm not VAT registered. I hope to avoid it, as I just need to send a handful of invoices, and I won't incur any costs for my work done. For now, I just want to keep things as simple as possible. I can always revisit that, when I start earning enough to justify using an accountant.

So, I won't mention VAT at all on my invoice. What exactly does that entail for me, and the EU buyer of my electronic services? How do they take the reverse charge into account for an invoice not specofying VAT/0-VAT, and what do I report to HMRC wrt. VAT for the work done?

[jamesbrown]

Yes, as CP mentions, the place of supply rules would suggest that, based on the information provided, the supply is outside of the scope of UK VAT if your company is VAT registered. You should state this on the invoice and not reference your VAT number.

Specific, detailed, example of an IT supply to Denmark here:

http://www.taxation.co.uk/taxation/A.../vat-or-no-vat

[TheCyclingProgrammer]

Nope, I'm not VAT registered. I hope to avoid it, as I just need to send a handful of invoices, and I won't incur any costs for my work done. For now, I just want to keep things as simple as possible. I can always revisit that, when I start earning enough to justify using an accountant.

So, I won't mention VAT at all on my invoice. What exactly does that entail for me, and the EU buyer of my electronic services? How do they take the reverse charge into account for an invoice not specofying VAT/0-VAT, and what do I report to HMRC wrt. VAT for the work done?

If you're not VAT registered then you have nothing to do w.r.t. VAT. You don't mention VAT anywhere on any of your invoices and you have nothing to report to HMRC.

The only responsibility you have as far as VAT is concerned is keeping an eye on your turnover if you start getting near to the compulsory registration threshold.

I'm not sure the end client needs to apply the reverse charge if you're not VAT registered but I'm not completely certain; however this isn't really any of your concern.