I've just had an email from FindWhat asking for my VAT number. I was under the impression individuals/businesses didn't have to register for/pay VAT unless they were earning around £70k/year? I am earning under £10k so this has come as a shock to me..
The email:
First and foremost, we would like to take this opportunity to thank you for choosing FindWhat.com for your advertising campaign. We hope that you continue to find advertising on the FindWhat.com Network one of the most effective ways to drive highly qualified traffic to your website.
Today we are contacting you in regards to the recent change in the European Union Value Added Tax (VAT) code effective July 1, 2003. As you are most likely aware, the revised rules subject electronically supplied services, including online advertising, to the VAT assessment. In order to comply with the revised tax directive, FindWhat.com is now legally obliged to collect VAT numbers from all EU advertisers. We therefore are requesting your assistance in complying with this new regulation.
Please send us your VAT number by replying to this email at your earliest convenience. For additional information regarding the VAT assessment or VAT registration, please visit <www.hmce.gov.uk>.
Thank you for your prompt attention to this matter. As we endeavor to comply with the new regulation, your understanding and cooperation are greatly appreciated. Please be assured that FindWhat.com remains dedicated to providing you with the best service possible and the most effective advertising available today.
They are supposed to collect VAT from you, but you don't have to have a VAT number to be charged VAT. Just tell them your not VAT registered. If you spend a lot then you may find it worth your while registering as you'll be able to claim this back against the VAT you would earn.
I think the threshold is £56k turnover to become VAT registered. Check out the customs website it's pretty good.
Thanks for your reply.
How I understand it now is that it I have to pay VAT to FindWhat on the advertising space I am buying from them, but I do not have to pay any VAT to the government as I am not selling any goods myself.
If so I was under the impression that you could knock off VAT from your expenses anyway (without registering)?
Sorry if I am asking stupid questions. I am very new to all this.
Also, deposit a relatively small amount to start out with, you may find it gets gulped faster than you expect !
(Still not sure all the clicks I had when using them were valid..)
Richdvk, you can voluntarily register for VAT if you think it would help you or if you expect to go above the threshold some time in the near future. Don't be put off by VAT, it's really simple and is done every quarter i.e. 4 times a year. The advantage is obvious as you can save on all your business expenses and of course the odd one or two that aren't!
Thanks again for your replies.
So far this year I have spent around £1000 with FindWhat. Does this mean I could have claimed £175 off my tax? Is it too late to claim this money back? Sorry to treat you guys like the IR :lol:
No - if you're not VAT registered then you have to pay VAT.
"If so I was under the impression that you could knock off VAT from your expenses anyway (without registering)?"
Absolutely not!! You have to be VAT registered to claim any VAT back.
How would you do it, anyway? You'd still have to pay FindWhat the VAT but wouldn't be able to charge VAT to customers as you'd not have a VAT number.
I'm wondering if you're thinking that you could just put the VAT you paid down as a company expense on your tax return, especially as you mentioned the Inland Revenue...
What you have to understand is that VAT is handled by Customs and Excise - NOT the Inland Revenue.
I'd also recommend you see an accountant before doing anything to try and avoid VAT.
Thanks wibble - you answered all my questions.
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