UK Tax Questions? Ask a UK Tax Advisor for answers ASAP
Ok… let me summarize with a scheme. Basically I will deal with money of my customers in 4 ways:
Buyers buy subscription plans (inbound cash flow):
Buyers hire a freelancer through my service and pay me for a project (inbound cash flow):
Freelancers buy subscription plans (inbound cash flow):
Freelancers are paid when the project is finished deducted a fee which I will retain, ie my profit (outbound cash flow):
I have to fill quarterly a record and pay the VAT I’ve charged to the HMRC. My company has been set up past 17 October. When is my Accounting period ending? As long as I don’t start trading do I have to declare something to HRMC?
Can calculate the VAT (multiplying or dividing by 1.2)... but didn't get how from a £10 fee you got £14!!!! With the VAT is £12! Where do the other £2 come from?
And then... if my turnover is less than £79000 (as it will probably be being a startup), when you say "If your company's turnover is below this level you do not need to register at all and can ignore the whole VAT caper" means that I am exempted from charging any kind of VAT at the beginning?
I also actually found discording documents which say that VAT should be also charged to EU customers... at least they don't have a valid VAT number which I should verify here: http://ec.europa.eu/taxation_customs/vies/ but in this case it becomes incredibly complicated!!!!
Anyway it seems it all depends on the place where the service is provided: http://www.hmrc.gov.uk/vat/managing/international/exports/services.htm
Actually the physical place of my servers is in the USA... Don't I have to charge VAT in this case or it's my office location? And what if I don't have a physical office but online employees who works from very different countries? Where can it be said as "the place where I provide the service"?
PS: none of similar service providers... not even this website... charge VAT!
You've completely missed my point:
I don't care about claiming VAT back on some office equipments... my major concern is if staying below 79 I have to charge VAT and fill the quarterly report as well
Lots of examples with goods... but actually I offer a service.. and indeed not even me! When I get the money from the buyer I'm just getting that to transfer them to the freelancer later on!
And if the freelancer is in Asia who can say to me that the service has been provided in the UK? Maybe the subscription can be said about that.... but for a project a company is paying a freelance through me... not paying me!
Below the GBP 79,000 you don't have to register or worry about VAT and quarterly returns at all. You don't even mention it on your invoices. If your freelancer was in Asia then as I have explained it is a zero rated supply so were you registered for VAT then the output tax on that transaction would be nil. That third party payments are being 'paid through me' you are actually for VAT purposes of being involved in a 'transferred management charge' situation. You have money going in (outputs) and out (inputs) and even if the amounts are the same under`the VAT regime they would have to be separately accounted for and, where appropriate, VAT charged or reclaimed. If you are not registered for VAT such matters can be ignored.