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Where Taxpayers and Advisers Meet

EU Company Insisting I register for VAT

lordemsworth
Posts:1
Joined:Tue Jul 14, 2020 9:32 pm
EU Company Insisting I register for VAT

Postby lordemsworth » Tue Jul 14, 2020 9:46 pm

Hi,
I could do with some advice if anyone can help please.

I'm based in the UK and make courses which I sell online. Last year I was contacted by an EU company; they asked me to make a course for them which they planned to sell on their platform and we had a royalty share agreement. At first they were happy to deal with me and pay me as an individual. In May this year they told me that they couldn't pay me as an individual, claiming that doing so meant their tax authority would treat me as an employee and tax me (and them) on the income. They requested I create a company as a vehicle to receive the payments. I created the company about 6 weeks ago.

They are now saying that the company must be VAT registered in spite of its income being significantly below the UK threshold. They claim that they cannot pay me until I am registered and have a number and that previous invoices from my company to theirs are invalid and will need to be re-issued.

Is this correct? It doesn't seem right, given that the whole point of the EU is to reduce trade barriers, but I have no expertise on this matter.

Thanks in advance.

les35
Posts:604
Joined:Wed Aug 06, 2008 3:09 pm

Re: EU Company Insisting I register for VAT

Postby les35 » Wed Jul 15, 2020 3:01 pm

It is common in the EU that businesses are all registered for VAT, irrespective of turnover. It is only the UK (awkward as usual) which has a high registration threshold.
You could try to argue the point with the VAT authority of your client's country.

You should consider the implications of registering for VAT and what effect it will have on your other clients.

les35
Posts:604
Joined:Wed Aug 06, 2008 3:09 pm

Re: EU Company Insisting I register for VAT

Postby les35 » Wed Jul 15, 2020 3:02 pm

If you sell to private individuals, you could explore whether it is VAT exempt private tuition.


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