short remote working contract - client in Italy

**Old Greg** · 18 July 2014, 14:48

Originally posted by manubbo View Post

Hi all,

my brother-in-law has an IT company in Italy and he may need some extra work, which we agreed an hourly fee for. I wrote an email to my accountant to explain the situation and ask for advice, but I'd like to know if anybody here had a similar situation and how they dealt with it (and I couldn't find anything on the forums)

- Project has a 10-days deadline, we agreed on an hourly fee. I will work at it outside office hours (weekends - evenings). I'm at the moment on a full-time contract with a UK based client (but that shouldn't really matter).
- I was thinking of using one of the PCG pre-made contracts, but my client is not registered in England and Wales. Is there any similar templates for overseas (EU) companies?
- If I make an invoice, the VAT I'll charge is 20%. In Italy the VAT is higher than that. Invoice will of course be in GBP but they can pay me in GBP.

Thanks

I wouldn't bother with a contract. An email confirming work to be done, duration and rate should suffice.

Someone will be along in a minute to tell you about VAT.

**TheCyclingProgrammer** · 18 July 2014, 14:54

If you're billing an Italian company for your professional services then its almost certainly outside the scope of UK VAT - ask your accountant to confirm.

If so, you do not include VAT on your invoices and if you're on the FRS its not part of your flat-rate turnover and doesn't have to go on your VAT return either.

You will need to include a notice on your invoice stating that no VAT has been charged and is subject to the reverse charge. The Italian client will account for VAT at your end.

Strictly speaking, you're supposed to report the sales on an EC Sales List to HMRC too. I don't know what happens if you neglect to do this. I'd be inclined to not bother for the sake of one single job, but that's just me.

As Old Greg says, an email covering the work involved, duration and your rate should be fine in place of a full blown work schedule, however I would still insist on having at least a Master Services Agreement in place between MyCo and ClientCo as it covers some key points such as confidentiality and MOO amongst other things and there's no reason why you couldn't use the PCG template for this.

**TykeMerc** · 18 July 2014, 14:58

Contract wise, as said a simple email/letter of agreed assignment, tasks, schedule and price (time and materials or fixed price) will be more than fine. Very easy to draft it's not at all complicated.
Invoicing- What they said and check with your accountant.

**manubbo** · 18 July 2014, 15:05

Thanks guys - an email will do (detailed as possible and both in Italian/English, luckily I'm an Italian native speaker!). Accountant came back to me regarding invoice and yes, she said is outside UK VAT scope. They will take care of the EC Sales List.

**d000hg** · 18 July 2014, 15:07

Originally posted by TheCyclingProgrammer View Post

If you're billing an Italian company for your professional services then its almost certainly outside the scope of UK VAT - ask your accountant to confirm.

If so, you do not include VAT on your invoices and if you're on the FRS its not part of your flat-rate turnover and doesn't have to go on your VAT return either.

WHS. Make sure to check your VAT returns (if done by your accountant) to be sure they didn't apply VAT anyway, since what you're doing is easy to overlook when your main invoices DO include VAT.

**sal** · 18 July 2014, 15:12

And for the price, since this is for a relative and are not expecting to be shafted, you are better off with a fixed price, rather than rate. Arguably this is better from IR35 perspective. If you have to do additional work and get additional payments you can always sign a second contract to cover that

**SpontaneousOrder** · 18 July 2014, 16:04

Originally posted by sal View Post

And for the price, since this is for a relative and are not expecting to be shafted, you are better off with a fixed price, rather than rate. Arguably this is better from IR35 perspective. If you have to do additional work and get additional payments you can always sign a second contract to cover that

Is IR35 even a concern for a 10 day contract?

**TheCyclingProgrammer** · 18 July 2014, 16:10

Originally posted by SpontaneousOrder View Post

Is IR35 even a concern for a 10 day contract?

Strictly speaking? It can be. Practically? Unlikely.

short remote working contract - client in Italy