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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15950
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I am a UK resident just starting to provide consultancy services

Resolved Question:

I am a UK resident just starting to provide consultancy services to an Italian company. My activities though are here in the UK ie I am employed as a consultant to look after their UK clients as they have no UK office.
I am not registered for VAT. I intend to invoice them as a self-employed consultant and pay UK tax after deduction of office expenses etc.
The Italians require a statement from HMRC stating that I am UK resident and that my taxes will be paid here otherwise they say they are obliged to deduct taxes from my invoices. Is such a statement available? Otherwise is my intended way of working feasible? Thanks
Submitted: 3 years ago.
Category: Tax
Expert:  TonyTax replied 3 years ago.
Hi.

You can apply for a ceritificate of UK tax residence using the online application here.

I'm not that familair with the Italian tax system but I am surprised that you are being asked for the certificate. Any Italian tax witheld from your fees will be deductible from your UK tax liability on the same income and you may be able to reclaim it once you have provided the certificate.

I hope this helps but let me know if you have any further questions.
TonyTax and 2 other Tax Specialists are ready to help you
Customer: replied 3 years ago.
Thanks I thought that cert was for transient people returning from abroad? Am I correct that I can work on a non-VAT basis? I really don't want to register for VAT. Thanks.
Expert:  TonyTax replied 3 years ago.
The certifcate can be used by any UK resident to prove where they are tax resident. As it is provided by HMRC, it has credibility as they will check the applicant's tax record before issuing it.

What turnover do you envisage for your business on an annual basis?
Customer: replied 3 years ago.
£145000 per annum
Expert:  TonyTax replied 3 years ago.
Thanks.

I'm drafting my next post now.
Expert:  TonyTax replied 3 years ago.

The certificate can be used by any UK resident to prove where they are tax resident. As it is provided by HMRC, it has credibility as they will check the applicant's tax record before issuing it.

As you will see here, you need to register for VAT if your turnover in the previous 12 months has exceeded £81,000 or you expect it to in the next 30 days.

If you do have to register for VAT and the Italian company you are dealing with is registered for VAT, you will not need to charge them VAT as they and you are within the European Union or the European Economic Area. They will, however, need to give you their VAT registration number and you should check that it is genuine using the facility here. If the Italian business is not registered for VAT and the services you supply are VATable, then you will need to charge them VAT.

Normally, you only take account of the value of goods and services supplied within the UK when calculating your turnover for VAT registration purposes unless those goods and services are exempt from VAT.