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Re: How money is handled by Upwork for UK VAT registered Limited Company

slotwek
Active Member
Lukasz S Member Since: Dec 19, 2016
1 of 4

Hi All,

 

I've tried to Google some VAT related questiones, however they're a bit cryptic to me (sorry - I am foreigner and I can't fully graps complex VAT issues - or my brain refuses it).

 

Anyway, I would like to know how Upwork handles money and how the process works? As a UK VAT registered limited company, I charge my clients VAT. So, if we assume that my hourly rate is £100 and that I worked 10 hours, I will charge my client £100 * 10 + 20%VAT, which in total is £1,200.

 

Could you explain me how Upwork handles money. Shall my rates include VAT in them? Or the client will pay VAT, as I normally do? It would be great, if you could explain this with an example (as I've provided above). Is there a difference between B2B and B2C?

 

BTW: those rates are made to make calculations easy.

 

Kind regards,
Lukas

vladag
Community Manager
Vladimir G Community Manager Member Since: Oct 31, 2014
2 of 4

Hi Lukasz,

 

Your clients on Upwork will be charged for the rate you bid and agree on at the onset of the contract. Their payment will be reflected in your account balance, minus the service fee (please also read about the VAT charge here in case you don't add your VAT number to your account), and you'll be able to withdraw your earnings to a preferred payment method you set up on your Get Paid page.

Untitled
slotwek
Active Member
Lukasz S Member Since: Dec 19, 2016
3 of 4
Hi Vladimir,

Thank you for the answer. If I understand you correctly, the rate I place will include VAT. Is that right? So, then I can take the whole amount (without admin fees) to my accountant to pay tax through my company. Is that right?

Kind regards,
Lukas
jmeyn
Community Guru
Joachim M Member Since: Mar 23, 2015
4 of 4

@Lukasz S wrote:
Hi Vladimir,

Thank you for the answer. If I understand you correctly, the rate I place will include VAT. Is that right? So, then I can take the whole amount (without admin fees) to my accountant to pay tax through my company. Is that right?

Kind regards,
Lukas

 Hi Lukasz,

 

Upwork kind of tiptoes around this topic. 

 

Your rate and your proposal should include the VAT if you are selling to a client in the UK. You will then have to manually issue an invoice to your UK client showing the net amount, the VAT amount and the gross total. Then your client can claim back the VAT they paid. Upwork only charges VAT on the services they sell to you, i.e. the monthly fee, if you are on a paid plan and the commission. If you entered your VAT ID in the appropriate field Upwork will not charge the VAT on these but instead report to HMRC together with your VAT ID.

 

Upwork doesn't charge VAT to your clients. How you handle that is between you and your client, see above the suggestion regarding invoicing. You UK clients will not receive a VAT invoice, i.e. an invoice compliant to EU regulations from Upwork. 

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