(Apologies in advance if this is an inappropriate questionb or if it is in the wrong section!)


Hello all,

I have just arrived, hope you don't mind if I fire a question straight away...

I am VAT registered and have just written a script for an overseas client (not EC). Do I charge them VAT?

I have tried HMRC's site and am no wiser, is anyone else in this situation?

Many thanks

Mark

I found this section on the HM Revenue & Customs website, but it's probably not much use for your specific question.

http://www.hmrc.gov.uk/vat/managing/international/exports/goods.htm

- NaomiM

I know that you don't pay VAT on overseas earnings, for the puproses of calculating your turnover, so I can't see that you'd charge it.

Are you a member of the Society of Authors? They know a fair bit themselves, and have an extremely good Tax helpline which is run by one of the specialist accounting agencies. The Writers Guild may well be able to help.

Emma

Thanks v much Emma and Naomi. Alas I'm not a member of either and I looked at that link but it didn't enlighten me much. I wonder whether anyone here has been commissioned to write anything for a non EC business and whetehr they charged VAT for it? I think the rules might have changed in January but I don't even know what they were before then!

I don't know, I'm afraid - only looked into it as it was an overseas payment which threatened to tip me into compulsory VAT registration, only it didn't because it was overseas. And that was a while ago. I'm a wuss about accounts, and can't face being voluntarily registered...

The Society does have a leaflet on VAT - free to members, £2 to non-members:

http://www.societyofauthors.org/guides-and-articles

which ought to tell you.

Emma

Thanks again - I think that leaflet may not be much use as it's quite old, and may have become outdated by new regulations this year.

Mark

This is how I understand it.

VAT on the export of goods or services is payable at a rate of zero per cent. Effectively therefore, you do not charge anything and exporters don't even mention VAT on their invoices, i.e. they don't even put in a figure of 0.00. However, you must raise an invoice for the transaction (i.e. bill the client with a paper document a copy of which you keep).

A problem that I think could arise in your situation could be if the work was carried out not in the UK but in an EU country (in which case local VAT would be chargeable) or in some other country (in which case local sales taxes could be payable). However, I assume you wrote the script here in the UK so it is being 'exported'.

A second problem would be if you were invoicing a purchaser in the UK (even though the script was destined for another country) in which case UK VAT would normally be payable. Provided you are sending the script overseas, invoicing somebody overseas and getting paid from overseas, just don't even mention VAT on your invoice.

Just be prepared to be able to prove to a VAT inspector that the work was indeed sold to somebody outside the UK. Sending a hard copy printout by some postal method for which the post office will issue a receipt showing destination would do for this purpose. If you can't prove something was exported, HMRC can demand the tax from you but you can't get it back from your client.

NB My speciality is export systems. I am not a tax specialist!

Stated without liability. Always take professional advice.

Chris

I was an accountant in a previous incarnation and should be able to quote chapter and verse. I'm not going to do that because I've been out of that game for too long. The rule was that services are taxable where performed and on the assumption you write in the UK, and are now exporting your work outside the EC, there should be no VAT liability.
BUT rules change and a wrong assumption could cost you a liability (with penalties) if you get this wrong.
I would just echo Chris and suggest you get professional advice in writing.
If you're VAT registered you probably have an accountant, and with the wind in the right direction he is an expert in dealing with authors. Email him and keep a record of his response and make sure that response is unqualified. This is what you pay him for.
Otherwise just email C&E with the query and keep a note of their reply. They are actually very helpful and a written response can be significant further up the line if there is a problem.

Janet

Thanks again all. I've managed finally to get through to HMRC and the chap I spoke to reckoned I would not have to charge VAT on it as the service is carried out overseas (it's for a TV how that TXs outside the EU).

I'm still a little doubtful but a little comforted...!