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bigduckontax, Accountant
Category: Tax
Satisfied Customers: 8430
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I am not resident in the UK, However I a currently providing

Customer Question

Hi, I am not resident in the UK, However I a currently providing independent consulting service to a UK firm, do I need to charge them any tax
JA: Have you talked to a tax professional about this?
Customer: Well, a general chat with an accountant who also advises on tax, but I wanted to do a double-check
JA: Anything else you want the Accountant to know before I connect you?
Customer: It's pretty simple. 1) I don't have UK or EU residency at the moment and currently outside the EU/ Europe. 2) A UK agency is currently signing me on to do a 10-day assignment for them, so I need to know if I should charge them any tax in addition to my fees.
Submitted: 9 days ago.
Category: Tax
Expert:  bigduckontax replied 9 days ago.

Hello, I am one of the experts on Just Answer and pleased to be able to help you with your question.

As a non resident all you need to do is invoice with no tax. In the unlikely event of the UK agency deducting tax, then under the Double Taxation Treaty between the UK and Nigeria any tax deducted is allowed as a tax credit against any Niger***** *****ability on the same income stream.

Customer: replied 9 days ago.
Thanks, ***** ***** should provide you a bit more detail. The UK agency that wants to contract is willing to pay, as an illustration, " GBP 200 per day plus EU VAT (if applicable) will be paid upon submission of a valid invoice". That means they are willing to pay the VAT in addition to my standard rate.
Customer: replied 9 days ago.
Please, with the additional information, would you still advise that I invoice with no tax
2) Kindly note that the contracting agency would be paying the tax, so is there any reason why I cannot invoice them with the tax so that I don't have to pay tax domestically in Nigeria
Customer: replied 9 days ago.
3) If I am invoicing them with tax, do I invoice at what rate?
Expert:  bigduckontax replied 9 days ago.

There is no VAT due, well there is, but the customer is in Nigeria it is a zero rated supply and the VAT rate charged is at 0%!

You should invoice the UK agency with no mention of any tax.

Customer: replied 9 days ago.
Thanks a lot. I appreciate this. I'd just assume that the safest thing is to ignore their reference to " GBP XXX per day plus EU VAT (if applicable) will be paid upon submission of a valid invoice". As you have advised, there is no UK or EU VAT applicable so I should simply ignore that.
Expert:  bigduckontax replied 9 days ago.

Correct, I am off to bed now and will respond to any follow queries you may have in the morning.

Customer: replied 8 days ago.
Thanks, ***** ***** I am quite clear on that now. Second, if I am going to be doing a lot of work with organisations in the UK and in the EU for the next 24 months, what is the most tax efficient way to do that. Third, if there would be several projects that I would be running even without being physically present in the UK all the time, how do I minimise my overall tax exposure bearing in mind that the important thing for me is to be tax-efficient across all jurisdictions, and not just in the UK
Expert:  bigduckontax replied 8 days ago.

Where are you actually living?

Customer: replied 8 days ago.
I am based in Nigeria and domiciled in Nigeria
Customer: replied 8 days ago.
a number of these organisations do not ask for nationality, they only ask for your postal address and a copy of your international travel passport. Based on that, they structure a draft contract that suits them and that is most tax efficient for them
Customer: replied 8 days ago.
For instance, just for illustration, if I get to do a project with the UK DFID- Department for International Trade and Development, or for a firm called Chemonics that is a private sector organisation that is often subcontracted by government agencies like, for illustration, the UK DFID, or the United States Agency for International Development
Expert:  bigduckontax replied 8 days ago.

Naturally, however, I would suggest that you invoice from Nigeria and pay tax there on your activities.

Customer: replied 8 days ago.
Thanks, ***** ***** one more question on this if you don't mind. I apologise for taking your time. I just need to fully understand this .
I understand there are one-stop online companies that provide immediate company registration in England, UK. One option is for me to register a company in the UK , and then the organisation in the UK, (say the private sector company representing UK DFID or USAID) would have to pay either the UK VAT rate or the EU VAT rate of 23%, that they are willing and obliged to pay, at their own expense. By so doing, I would minimise my tax obligations in Nigeria on that particular income, due to the double tax-treaty. I understand that is perfectly legal, under law and accounting. Please is that option an advisable option.
Expert:  bigduckontax replied 8 days ago.

You would only need to register the company for UK VAT if in any 12 month period the turnover exceeded £85K.