VAT questions with Adwords

[Silver420]

Tweet

Ive been using adwords for about a month now and am still unsure (even though ive read many posts) if im actually paying VAT or if its something i need to account for?

In google i have said that i am a business user, though i do not have a VAT number entered.

Am i right in thinking from 1st Jan 2010 i would have been charged VAT at Irish rates if i do not have a VAT number entered in my account? (21%)

I hear alot of people got an email saying this though i never did, and if i did i def didnt see it.

As im spending quite alot with adwords i need to be sure of exactly what the situation is.

Also if i register myself as VAT registered will i be able to claim back the 4% difference as even that would be worth it.

Grateful for any thoughts or input

[temple3188]

Would also like to know this, I have been having a look around a4u topics on this and can't seem to find an easy answer. Would really appreciate it or at least a link to where I can find out as well.

Thanks

[MattSweet]

I think you are charged Irish rate VAT on your click costs if you aren't VAT registered. When you VAT register you don't get charged any VAT on your click costs and Google will usually refund the VAT paid on your entire account history. This is how it was when I was in your position anyway.

Once you are registered, the VAT is also accounted for in an odd way despite you not paying any. Speak to Keith at HRBS.biz - a legend in the affiliate accounting area. I'd definitely recommend an accountant if you are going anywhere near VAT.

[Silver420]

Thank you for that.

I do need an accountant, finding a good one is easier said than done though. (i live in a small area)

So i can get my VAT back from google once im VAT registered for the whole period? In your account as it doesnt show VAT its hard to work out if your actually paying. In the help topics it says your not, though then i read about several people getting the email mentioned above and though otherwise.

When you say "usually pay it back" has there been instances where they havent? Would i still be able to claim back the 3.5% difference?

Sorry for all the questions, and thanks for the reply

[MattSweet]

It was my understanding that if you aren't VAT registered you have to pay the 21% Irish VAT on your click costs and cannot claim anything back. If and when you do register for VAT you inform Google and they change your account and calculate your VAT refund. This should be the amount of VAT you have paid on the entire account history.

However, reading this - Reclaim Irish VAT | Google Adwords | Reverse Charge | Advertising : HRBS.biz | Fixed Fee Accountants | Free Guides | Save Tax | VAT Advice | Self Employment Help - it seems you may be able to claim the VAT back without being VAT registered as long as your account is for business purposes. So you may be able to get a refund on the entire amount of VAT you have paid.

Give Keith a shout, it's all done via email and phone. He works with quite a few people on here. HRBS Barnsley Fixed Fee Accountants | Tax Planning | VAT Advice | Payroll Specialists | Book Keeping | Hands-on Accountancy Support | Self Employment Help | Quickbooks Accounting in Yorkshire

[Silver420]

Cheers for the link, may give him a ring soon to see what advice i can get

Edit: I just wanted to say the above link isnt 100% accurate from what i can see. In regards to

" 1. Log in to your Adwords account
2. Go to the “My Account” tab
3. Choose “Billing Preferences”
4. Click [Edit] next to VAT information
5. At Advertising Purpose chose yes for “I use Google AdWords for business purposes”
6. Click save changes

In due course Google will verify your details and issue a refund."

Ive read severalplaces that have said that you only get a refund IF you have a VAT number otherwise google will not issue it. Im not sure where is giving outdated information though i will still ring them up to see what the current situation is. Thanks once again

[hrbs]

Hi
Google no longer allow you to change the status of your account from non-business to business yourself.
You have to complete a form at https://adwords.google.com/support/a...ype=vat_change .
You do not need to enter a VAT number.
I'll be updating the guide after 31 January as I'm busy with tax returns.

Regards

Keith
HRBS.biz 01226 379000

[moredial]

There is a lot of info on the VAT site that covers EU VAT on non-goods from Jan 2010 including the form that you need to fill in and when you have to send it in by for sales you make to the EU. I take that to read that Google will need your VAT number for them to be able to fill in the form, or they must charge you VAT.

The easiest way to get this right is by asking the VAT man when you register. Why pay and accountant (sorry Keith) when the VAT man is responsible for helping you to get your VAT right and that includes answering any questions you may have.

[Silver420]

You do not need to enter a VAT number.
I'll be updating the guide after 31 January as I'm busy with tax returns.

But im already registered with google as a business, though i have no VAT number, I was under the impression i was already getting charged 21% Irish VAT as i hadnt entered a VAT number to get a credit back

I was hoping that i was owed back the 3.5% difference, not that i had to pay an extra 17.5% VAT on how much id spent so far with google as thats really going to hurt me :cry

[Silver420]

I take that to read that Google will need your VAT number for them to be able to fill in the form, or they must charge you VAT.

I soooo hope your not right otherwise i will be getting one big vat bill! Im desperatly hoping ive already been charged VAT on my campgains

[hrbs]

But im already registered with google as a business, though i have no VAT number, I was under the impression i was already getting charged 21% Irish VAT as i hadnt entered a VAT number to get a credit back

Check your Google invoices. They will show you the VAT, if any, that has been charged.

Regards

Keith

[Silver420]

Im not sure where im supposed to be looking, in Billing Summary? If so it never mentions if VAT is paid or not

Edit: Having a quick read in the help section i see it says that there is a new billing interface though not everyone has it yet? Maybe this is why i cant see the info?

Edit Edit: Just seen where you can click "invoice" and it shows 0 and says

"* Services subject to the reverse charge - VAT to be accounted for by the recipient as per Article 196 of Council Directive 2006/112/EC"

That has really not made my day

[hrbs]

Im not sure where im supposed to be looking, in Billing Summary? If so it never mentions if VAT is paid or not

Edit: Having a quick read in the help section i see it says that there is a new billing interface though not everyone has it yet? Maybe this is why i cant see the info?

Edit Edit: Just seen where you can click "invoice" and it shows 0 and says

"* Services subject to the reverse charge - VAT to be accounted for by the recipient as per Article 196 of Council Directive 2006/112/EC"

That has really not made my day

Hi

You have not been charged Irish VAT and therefore there is nothing to reclaim.

Regards

Keith

[Silver420]

This is the problem i feared though.. So im now guessing i owe 17.5% VAT on top of all my campgain costs... Ouch really isnt the word. Id taken into fact that i had been charged vat and only had the tax to pay... adding another 17.5% on to my total outgoings is.... *speechless*

[moredial]

This is the problem i feared though.. So im now guessing i owe 17.5% VAT on top of all my campgain costs... Ouch really isnt the word. Id taken into fact that i had been charged vat and only had the tax to pay... adding another 17.5% on to my total outgoings is.... *speechless*

I think you need to phone up the VAT help line to get this straight.

Your affiliate commissions should already have VAT added to them, else you need to send a VAT invoice to claim VAT not paid. Paying this over does not have any impact on your turnover or profits (compared with someone who is not VAT registered). The only thing you need to 'pay' is the VAT on the advertising costs which is offset against the VAT you reclaim from these same advertising costs, i.e. you don't pay anything extra because the amounts cancel each other out, nor is your VAT liability reduced by something you have not paid.