Contract in Ireland - What rate is calculated?

[jonnyboy9]

Hi,

I have just been offered a contract via a UK agency for a client in Ireland at a rate in Euros.

I have my own limited company and I presume I invoice the UK agency in GBP plus VAT(or do I?).

But what rate do I use?

Thanks very much,
Jon

[northernladuk]

Hi,

I have just been offered a contract via a UK agency for a client in Ireland at a rate in Euros.

I have my own limited company and I presume I invoice the UK agency in GBP plus VAT(or do I?).

But what rate do I use?

Thanks very much,
Jon

What does your contract say and what did you negotiate with the agent? I would expect it to be in pounds if it is a uk agent but just be on your gaurd he doesnt try pass on currency changes to you or something daft like that.

[BlasterBates]

If you're working in Ireland you probably need to pay tax there, even if you are there less than 6 months. I would take advice from an Irish accountant. Just be aware that if you have Irish sourced income it will be subject to their tax system, in the same way that you pay foreign tax on dividends on foreign companies even though you don't live there.

A lot of contractors get into trouble because they invoice through their Ltd whilst working abroad, and then the foreign tax authority catches up with them.

[northernladuk]

Have a look at this search, lots of questions about Ireland...

Ireland site:forums.contractoruk.com/accounting-legal/ - Google Search

[bless 'em all]

I've had quite a few calls about gigs in Ireland and the moment I mentioned I'd be invoicing in £ the call pretty much died there and then.

They won't want to risk currency fluctuations with the Euro, that's what they expect you to do. The rates are rubbish anyway and the cost of living in and around Dublin are stupidly high for a country who's economy is going down the tubes fast.

[borderreiver]

Invoice in euro if you like (I do, but then I do fixed-rate work), but you will have to factor in the exchange rate risk into your rate. The pound is about 10% stronger against the euro than it was about 6 months ago, just as an example. It also complicates your accounting.

Personally, I wouldn't agree to any rolling contract that required euro invoicing unless the rate could be renegotiated every month or so.

[Gentile]

An interesting question, and I don't honestly know the right answer to it. I suspect that a more expert opinion might be obtained in the Accounting / Legal sub-forum.

FWIW, though, if the agency that your proposed contract is with is actually located in the UK as you say (which would be quite unusual), rather than just having an office in the UK but operating across Europe, and yet the rate has still been quoted in Euros, I'd be quite worried about that personally. EU rules certainly do allow you to operate a UK-based business (even if, as is usually the case, the actual work goes on within the client's own country), and to provide a service to a client in another country from a UK base. And, if you were to choose to operate in that way, you would be free to charge the end user in any currency you wanted to and that they would accept. You'd just need to apply the EU VAT rate to the transaction as it would be between entities operating in different EU states. However, for two entities that are operating in the same country (which is the position you say you're in), it'd be unusual for those two entities to work in a third country's currency, even if the actual work went on there. And, between two entities operating in the UK, the UK rate of VAT would probably be the rate that was applicable.

The reason I can't be more clear on this is that none of the contractors I know that work in the Eurozone work in any of the ways described above. Instead, what they've all done is set up new companies in their client's country, using local accountants and the host country's equivalent of company formation agents. Most people seem to prefer working that way, possibly because it avoids getting into any potential disagreement with the local tax authorities, and also because where the currency of the country the client is located in isn't Sterling, it will always be a disadvantage to one or other of you to work in the other one's currency.

Here's hoping you can get more pertinent advice specific to your circumstances in the Accounting / Legal sub-forum.

[psychocandy]

Dunno about working in Ireland but invoicing in euros = bad idea. Down 10% since a year ago. Tell me about it.