VAT situation

[madeinbritain]

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What is currently the VAT situation with CJ.

I have been playing it that it's VAT exempt (or not VAT rated)!?

But I am getting concerned to be honest. Had a chat with a VAT inspector on the phone and it sounded like I could be libel.

Because the income is generated from UK merchants.

I would really like to set my mind at rest over this, incase of a VAT inspection.

[Barry]

CJ are a US based company - so as an affiliate you can't charge them VAT.

[madeinbritain]

yes its whether we are libel to pay VAT as a UK company. Our sales are derived from Uk sales.

[marky]

very likely yes. even more likely if you are claiming input vat on services related to these sales (like adwords)

Please speak to an accountant & the vat helpline

on the other hand, what do other forum members who are vat registered and have cj & adsense payments ?

[wibble99]

You are providing a service to a US company, providing them advertising space. You're not dealing with the UK companies that may use that advertising space. You never bill any of these UK companies, you bill CJ.

I can see that it might get confusing for the VAT people if you talk about UK merchants you promote. It might be better to simply say that you provide advertising space to CJ, and not get into the details of what advertising is actually displayed as they might cause confusion.

[wibble99]

Also, I emailed Customs & Excise (3 years ago, but ought to still stand) asking about this. I said that I provided advertising for a US company and wanted to know if I could still claim VAT back. This is a snippet from the reply:

1. In reply to your e-mail, the supply of web site advertising is classed as a supply of services for VAT purposes and VAT Notice 741 Chapter 11 is relevant.(you can view this on our website , address = www.hmce.gov.uk)para 11.6 relates to website advertising.)
In order to determine whether you need to charge VAT on your sales you must establish the place of supply - in the case of your USA customer the place of supply is currently the USA and the sales would be classed as outside of the scope of UK VAT (not exempt).

2. If you registered for VAT and made taxable supplies as well as these outside of the scope supplies - you would still be entitled to reclaim any VAT incurred on your expenses/purchases made in relation to the outside of the scope of UK VAT supplies. The partial exemption rules will not apply in this case as the sales made are not exempt but outside of the scope sales.

[madeinbritain]

thanks wibble99, sounds like good advice.

think i made a mistake talking about uk merchants