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I've sold a photograph for use in a German emagazine and they have asked for an invoice including all taxes. Now, I am an amateur and I make pennies from photography so I'm not VAT registered, although I do declare my meagre earnings in my tax returns. Am I right in thinking that I have no tax to add to the invoice?
Any advice would be greatly appreciated.
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Yes, you are correct, if you are not registered for VAT you don't need to add it to your invoice.
For registered companies, if the cheque is coming from outside UK you do not need to charge VAT. I would put a VAT line on there but set it to zero.
I know it's being very picky but if you're not registered I wouldn't put the line there even, it would just make things more confusing. There's a difference between being VAT registered and charging at zero, and not being registered so not charging. I'd suggest if it's an issue a short explanatory note stating you're not registered would suffice
Thanks for the quick responses. All very helpful. I've gone with no VAT and Stephen's suggestion that I advise I'm not VAT registered.
Unless the bill is over £73,000 of course
Only in my dreams
Just a wee comment here.
Although there is no requirement to register for VAT if turnover is under £73,000 (or whatever the current figure is), sometimes it can be hugely advantageous to do so.
This is particularly the case if your "product" is in a category that is zero-rated, in which case you are not having to collect and pay VAT on your sales but you can claim a refund of any VAT paid on your purchases.
In the days before e-magazines, I used to produce a quarterly magazine that was sold on subscription. I did not have to charge VAT to my subscribers but I could reclaim the VAT that I paid on my supplies and services - paper, telephones, office supplies, etc., etc. Even although my turnover was only about £5000 a year, it was still well worth being VAT registered at that time.
Thanks for the heads up. Maybe VAT registration is something for the future, but I really do only make a few quid a year at the moment. If I can make more, which I hope to be able to, I will certainly consider it.
It would actually be fraudulent to charge VAT when you're not VAT registered with HMRC so make no mention.
Most farmers and even small-holders register for VAT because it allows them to reclaim input VAT. If you sold just books or similar zero-rate products, you'd be in a similar position.
Quote: Thanks for the heads up. Maybe VAT registration is something for the future, but I really do only make a few quid a year at the moment. If I can make more, which I hope to be able to, I will certainly consider it.
If most of your sales are to the public I would put off VAT registration as long as possible as it automatically makes you 20% more expensive unless your products are zero rated. I know some photo books are now zero rated but I don't think the same applies to prints. I could be wrong though.
Here's the bible ...in case you decide to register...
don't forget that it's not just VAT you have to think about. If you start to make regular sales you should think about registering as a business or at least self assessment
In theory if you make a single sale you need to register or face a £100 fine.
I'm still registered from when I had my business, I still have a small income from maintenance and just do my own books/tax return.
You can use spreadsheets to keep your books and Which do a program called Taxcalc which is excellent for preparing and filing your return.
Of course it all depends upon how much you are turning over.
I'm earning less than £1000 pa at the moment. The plan is to increase my profile and hopefully have a small business going when I retire (if I can make that happen early all the better). I take the point though - it might be worth registering as a business at the moment just to keep the tax man happy.
Thanks for all the feedback so far. I didn't expect such a response.
I live and pay taxes in Canada, and we obviously don't have exactly the same rules, but here's a little bit of info on my experience here, and suggestions for supplementing your retirement income if required, and at the same time giving you something to keep the old brain active:
Through my interest in a certain brand of vintage camera, and lenses, it became a sort of hobby, and I inadvertently became fairly knowledgeable about the product through researching availability and prices on Ebay, and reading many reviews by experts on various of the subject. Subsequently, I would natuirally recognise a deal on a particular item in the ebay listings, and began to take advantage of some of them; at first because I wanted to try the item with a view to keeping it for my own use. After being successful in a number of transactions, and eventually reselling a few items, I realised more than a healthy profit on many items. The key here is being knowledgeable about your subject, and doing solid research: in my case it was a bonus benefit of a hobby, and there is no requirement to report these relatively minor transactions to the tax department, thus realising a non-taxable benefit from my hobby. I have not persued this activity with an eye to making money, but if one were to do so, I believe it would be not too difficult to make 5 or 6 hundred per month. However, be prepared to have the odd ****-up.
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