I am a UK-based self-employed consultant, not registed for VAT An EU-based client wants EU VAT number otherwise they won't pay If I register for the number, is it just a paperwork hassle, or do I have any other duties? Can I de-register later? It's only for this one contract and I do not intend do use it - no VAT is charged on my services
The way I understand it VAT number in EU serves as EU-wide tax id. There is a VAT number database where you can check the validity of counter party VAT number. In Czechia you are required by law to acquire VAT number no longer than a month after you issue your first invoice to an EU counter party. I suggest you check your regulations as you might be required to get one anyway.
There's no obligation to be registered for VAT in the UK unless you meet the following conditions:
Compulsory registration You must register for VAT if:
you expect your VAT taxable turnover to be more than £85,000 in the next 30-day period your business had a VAT taxable turnover of more than £85,000 over the last 12 months You might also need to register in some other cases, depending on the kinds of goods or services you sell and where you sell them.
Of the ten years I've been freelance, I've been VAT registered for about eight of them. Since doing it, I've had the benefit of being able to claim back any and all VAT charged on any capital expense, software, hardware and expenses related to the business.
So really, for the hassle of slightly extra paperwork (Which my accounting software already does) you may as well just do it. If you work for large companies, they're not bothered by the extra 20%.
Against it though, they have tightened up the aspect where you could charge 20% and only have to pay 13% to HMRC (The old film & tv levels, now brought into line) so there's no more free money. But for my circumstances, it's still worth it.
Come December/January though, who knows. I just hope to be able to still work for EU companies...
In France a microentrepreneur is exempt from VAT below a certain yearly income. However some freelancing sites do charge VAT, unless one provides a VAT number. Requesting a VAT number is not difficult, but then you have to charge VAT consistently on all your contracts, despite being exempt (as far as I understand). There is no certainty on this issue.