Lving in the UK the threshold for VAT exemption is £86,000 a year, a figure which I am unlikely to exceed when just starting out as a newcomer at Upwork.
Why should I therefore be encouraged to register for VAT as I most likely I will have to make extra payments to the taxman in registering?
Paying £2 penalty to Upwork for not registering for VAT for every £100 pound earned does not sound a lot to me.
Am I correct in assuming that VAT is only for the bigger income earners in Upwork?
Peter, it is not really a penalty. Upwork is obliged to pay.
Whether or not we charge VAT with our freelancing services, is immaterial. We do pay VAT on the sort of service Upwork offers. We freelancers are Upwork's customers.
In France it is possible to get a VAT number to cope with this sort of contingency. So perhaps this is also possible for freelancers in the UK?