Contract for overseas client but working from UK

[damyarn]

I have a chance of a contract working for an overseas client (non EU) but will remain based in the UK - working from home remotely.
Have Ltd company but not sure how this arrangement could work in terms invoicing VAT etc etc

Have not agreed any terms yet or talked about whether contract will be local currency. Could be 12 months of work so want to get it set-up in best way.

I guess there are various options in terms of contract/invoicing (local currency or GBP) local bank account or have them pay into UK bank.

Anyone done this kind of arrnagement and have any advice?

[LumbaBread]

I have a chance of a contract working for an overseas client (non EU) but will remain based in the UK - working from home remotely.
Have Ltd company but not sure how this arrangement could work in terms invoicing VAT etc etc

Have not agreed any terms yet or talked about whether contract will be local currency. Could be 12 months of work so want to get it set-up in best way.

I guess there are various options in terms of contract/invoicing (local currency or GBP) local bank account or have them pay into UK bank.

Anyone done this kind of arrnagement and have any advice?

In before someone else rips you apart and throws the bits in a big fire !
Maybe the link below will provide some answers :

http://forums.contractoruk.com/busin...ract-soon.html

[borderreiver]

I do this, but my client is EU-based so VAT handling is different (reverse charge). I presume a non-EU client would mean you invoicing without VAT as it's technically an export of services, but IANAA ;-)

Your main headache is the currency exchange rate risk, unless your client is willing to invoice you in GBP. If not, you have to somehow factor in that risk to your contract rate or make sure your contract is renewed often enough for you to renegotiate it every time so you can adjust to the prevailing exchange rate. It depends on your client, but it may not always be the easiest thing to do.

Whether your invoices are paid into your UK business account or you open an additional one in the local currency is something you have to look at yourself. I know most banks offer EUR, USD accounts and whatnot, but you will have to shop around to get a good deal. Most banks will hammer you with fees and awful conversion rates if you're not careful though :-(

HtH

[captainham]

I have a chance of a contract working for an overseas client (non EU) but will remain based in the UK - working from home remotely.
Have Ltd company but not sure how this arrangement could work in terms invoicing VAT etc etc

Have not agreed any terms yet or talked about whether contract will be local currency. Could be 12 months of work so want to get it set-up in best way.

I guess there are various options in terms of contract/invoicing (local currency or GBP) local bank account or have them pay into UK bank.

Anyone done this kind of arrnagement and have any advice?

I'm working this way, although via a UK agent so my VAT will probably be different to yours.

Check here for VAT rules on place of supply. This should tell you what to do re: VAT (for me, I invoice a UK agent therefore I include UK VAT @ 20%).

Currency is of course down to your negotiation; you want GBP if you can get it. I'm invoicing in EUR unfortunately, but better than no contract!

Mine is just paid direct into my UK biz account, therefore converted immediately on the spot rate of the day (commercial rates tend be a fair bit better than tourist rates, check with your bank).

I considered setting up a EUR account with my UK account, then transfer money out as required, but I worked out it would only potentially save me a couple of hundred quid a month and create extra hassle to track/manage, so decided against it.

[captainham]

One other thing re:invoicing. If the invoice is not subject to UK vat then you have to state that on the invoice (I think). And if you are invoicing in anything other than GBP, the invoice still needs to specify the GBP rate on the day of invoicing (see here).

For working out the GBP rate, HMRC publish a monthly rate you can use (here), although I use my bank commercial rate that is in force onthe day (taking a PDF copy as proof), as I feel that suits me better.

[jamesbrown]

One other thing re:invoicing. If the invoice is not subject to UK vat then you have to state that on the invoice (I think). And if you are invoicing in anything other than GBP, the invoice still needs to specify the GBP rate on the day of invoicing (see here).

For working out the GBP rate, HMRC publish a monthly rate you can use (here), although I use my bank commercial rate that is in force onthe day (taking a PDF copy as proof), as I feel that suits me better.

You should state "These services are outside of the scope of UK VAT." In that case, you don't include your VAT number or any exchange rate that applies to VAT. You can also factor in profit/loss on currency exchange in your corporation tax return.

[captainham]

You should state "These services are outside of the scope of UK VAT." In that case, you don't include your VAT number or any exchange rate that applies to VAT. You can also factor in profit/loss on currency exchange in your corporation tax return.

Yes, a useful clarification, thanks for that.

For profit/loss on FX variations, you only need to reflect this in your turnover for the CT return (as opposed to a separate figure or anything like that; I don't believe there is a separate space for this on the CT return). The currency variations are directly related to the goods or services you are selling, so you will just increase/reduce your final turnover accordingly (i.e. you will pay CT gains you make, likewise any losses you make will reduce your turnover and therefore your CT liability).

[Boo]

Have not agreed any terms yet or talked about whether contract will be local currency. Could be 12 months of work so want to get it set-up in best way.

I guess there are various options in terms of contract/invoicing (local currency or GBP) local bank account or have them pay into UK bank.

If you possibly can then you should get them to agree to pay you in GBP. Risks are easier for them to bear than you. There is no need to open a foreign BA, they should have no issue paying into your UK one but it may cost you £20 or so to receive each payment, check with your bank.

Contract should also contain a phrase like "all disputes shall be resolved under English law", this means you & they will have disputes settled in a UK court rather than a foreignian one.

Good luck,

Boo

[captainham]

If you possibly can then you should get them to agree to pay you in GBP. Risks are easier for them to bear than you. There is no need to open a foreign BA, they should have no issue paying into your UK one but it may cost you £20 or so to receive each payment, check with your bank.

Contract should also contain a phrase like "all disputes shall be resolved under English law", this means you & they will have disputes settled in a UK court rather than a foreignian one.

Good luck,

Boo

Yeah I really hate those foreignian courts, full of Johnny Foreigniars