VAT for web design

Giorgio

Hi,
I am a sole trader and I was thinking to start doing web design.
Do I need VAT for that? I mainly have clients outside the UK, my main market is Europe and Australia.
Thank you

AlexandraMoore

Hi Giorgio,
The threshold for when you have to register for VAT is when you reach a turnover of £85,000 though you can voluntarily choose to register when earning below this amount if you want to.
As you’re going to be working with overseas clients mostly it’s unlikely that you’d see much benefit from registering as in most cases your clients would be outside the scope of being able to charge them VAT.
We’ve some handy information on VAT in our Knowledge Centre, such as this article, “VAT registration and reporting explained” https://www.crunch.co.uk/knowledge-tax/flat-rate-standard-vat-registration-explained

If you need more help, you may benefit from our ‘Ask an Accountant’ service where you can book a one off call with one of our accountants https://www.crunch.co.uk/features/ask-an-accountant

Feel free to contact us if you have anymore questions - Alexandra

Giorgio

Hi Alexandra,

Thank you so much for your answer. My main doubt is because I know that some activities need VAT registration, so it’s compulsory even if I don’t reach the £85K threshold.
So, is web design an activity that doesn’t need VAT before reaching the £85K threshold?
Thank you

AlexandraMoore

There are no special requirements for web designers to be VAT registered under the £85K threshold - Alexandra

EmmanuelJohn

As a sole trader offering web design services, you may be required to register for Value Added Tax (VAT) in the UK depending on your circumstances. If your annual turnover exceeds the current VAT registration threshold of £85,000 (as of 2021), you will need to register for VAT and charge VAT on your services.

If your clients are based outside the UK, you may still need to register for VAT if you supply services to them that are subject to VAT in their country. This is because some countries have different rules and thresholds for VAT registration. Therefore, it’s important to research the VAT rules in the countries where your clients are based.

You may also consider registering for VAT voluntarily, even if your turnover is below the threshold. This can enable you to reclaim VAT on business expenses, which may be beneficial to your business.

It’s always advisable to seek professional advice from an accountant or tax specialist before making any decisions regarding VAT registration, as the rules can be complex and vary depending on your circumstances.

autumnbhlaze

As a sole trader providing web design services to clients primarily outside the UK, you may not need to register for VAT. However, it’s crucial to consult with a tax professional or HMRC to determine your specific VAT obligations based on your business structure, income, and the location of your clients. They can provide tailored advice on whether you meet the threshold for VAT registration and any potential exemptions or reliefs that may apply to your situation. Also I can recommend to read Alexander Reidinger on Medium.

calcvat_uk

Yes, you’ll need to register for VAT if your taxable turnover exceeds £85,000, regardless of where your clients are based. For clients outside the UK (in Europe and Australia), VAT may still apply based on the “place of supply” rules. You might also need to account for EU VAT on digital services sold to EU consumers. Consult with HMRC or a tax advisor for specific details.

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