Clients paying in £££’s

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This topic contains 6 replies, has 3 voices, and was last updated by Profile photo of Anonymous Anonymous 9 years, 8 months ago.

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  • #52776
    Profile photo of Anonymous
    Anonymous
    Participant

    We’ve been asked by some clients to take payment for services in form of £££’s into our UK bank account. And also to take payment for goods that are being supplied by 3rd parties

    1. How do we stand with the UK / Spanish tax man on this as we don’t want to end up paying tax on it twice. Once is quite enough thank you!!

    2. If it’s declared here in Spain how do we avoid some problems with exchange rates and the Spanish saying the rate should be X etc..

    3. If we take payment on behalf of other 3rd parties etc like a float for minor work to be completed and then we pay the plumber etc how do we avoid paying tax on this amount!

    Probably other questions to follow.

    Ian

  • #70617
    Profile photo of Anonymous
    Anonymous
    Participant

    Does your business have a Sterling account ? In what currency are you invoicing?

    1) If your business is set up in Spain. You will be taxed on world Income further you will have the Euro business/Vat number. If tax is decucted which it should not be once you provide the business/VAT, This can be claimed under double taxation which exist between UK/Spain.

    2) You will need to ask the Hacienda or equivelent the rate applicable on the invoice date ( yes I know easily said than done ) In order to cover yourself apply the worse possible exchange rate whilst invoicing.

    3) Take an amount on account.

    Be careful I feel some money luadring behind all this. I am hope that I am wrong for your sake.

  • #70620
    Profile photo of Anonymous
    Anonymous
    Participant

    Hi Ian

    why cant the clients just pay for the money to be exchanged. They should be the ones bearing the cost of exchange.

    As Shakeel says it sounds like money laundering or they are wanting to pay in Black money. Whatever case as soon as you declare it to the Hacienda they will chase it and trace it back to them (or you will get a lengthy interview asking you to explain where the money comes from). In the end it will be you left with the problems/taxes/bills, so I just would not do it

    Regards

    Vince

  • #70637
    Profile photo of Anonymous
    Anonymous
    Participant

    Thanks for the feedback. We invoice in Euros.

    The amounts would be small (less than 200 Euros), but still I don’t want to get a double tax whammy. As you say it’s easier to deal with the hacienda here than both UK & Spanish!

    The question has come from 2 clients who don’t have full details of how to use or access their Spanish bank account and need a few things for their property. As I informed them, the mortgage/electric/water/gas companies have been set up on the Spanish account, so they are fully up and working and they have English speaking staff to help you out!

  • #70652
    Profile photo of Anonymous
    Anonymous
    Participant

    One other thing to bear in mind Ian. It is now possible to get small amounts of currency transferred through currency brokers (I think the minimum now is €500) on a regular basis. This may be a solution for them

    Vince

  • #70653
    Profile photo of Anonymous
    Anonymous
    Participant

    a small amount can be sent via money corp/post office.

  • #70655
    Profile photo of Anonymous
    Anonymous
    Participant

    You can also ask them to send you the money and than raise an invoice according to amount received/credited (i.e. working backwards )

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