[buserror]

BTW there is a HUGE catch with that fixed rate system. It more or less prevents you from doing any work overseas (for a company that doesn't have a UK office). The reason is that the work you do oversea would have to be invoiced as /zero rate VAT/ -- however you will still be liable to pay back 13.5 (or 14.5 after a year) VAT from what you invoiced. This is cruel, but there is no way around it. The bottom line is that HRMC considers that you need to pay 13.5 for any VAT rate you charge, and 'zero rated' actually means you are 'charging' zero, but you are still technically charging! I can tell you it was a pretty massive headbanger for me earlier this year, and luckily the company I worked for had an obscure UK office that allowed me to re-invoice everything with the 'proper' 20% VAT

So if you plan to sell work to an oversea company in the future, make sure to get off the simplified VAT scheme beforehand. I know I will, come november, the shackles aren't really worth the tiny little money you get in the end.

[seszett]

Strange. In France you don't have to contribute VAT for the services you invoiced abroad (well, outside the EU. Inside the EU is another matter). You don't receive it, you don't pay it.

It seems absurd to make a company pay back a VAT amount that it has not perceived.

[buserror]

I know, but I really went over with a comb on the HRMC website, asked them, asked all around and everyone agreed. These transactions are 'zero rated' -- therefore, you need to pay 1[34].5% VAT back... Stupid, but the rule is clear.

Incredibly bizarre that as a small company, you try to 'export' and thus bring cash back into the economy, and are in fact actively prevented from doing so when on that scheme.