VAT & Adwords explanation

[Wardy]

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I'm not much of a "finances" kinda person so I've never *properly* understood all the VAT stuff. Yes I know it's another of these VAT/adwords questions but I've searched the others and I'm still none the wiser...

Can anyone answer this for me (in simple terms if possible) as although I should understand it I don't and just go along paying without actually properly understanding it all

Google adwords if you are not VAT registered you pay tax on your spend of 21% I think it is.
So if you spent £2000 in a month you would also get charged an extra £420 VAT (correct me if I'm wrong as I could well be).

If you are VAT registered do you just get charged £2000? So you end up being £420 better off for that month as you don't have to pay that money? Or is that that money taken another time?

Cheers
Wardy

[spatny]

Hi,

This is how i understand it.

If you have an EU vat number, you will not have to pay vat on your google invoice.

However, if the item was a physical product that you had brought from Google, and they sent it to your business address, you would have to claim it. As the google adwords is 'a service' this does not apply.

Thats how i understand it from my accountant.

Peter

[Wardy]

Thanks for the reply Peter.
So basically if your not registered (in my example above) then you are basically losing out on £420 per month for nothing?!

Cheers
Wardy

[spatny]

Hi

Yes, it does,

Also you can claim vat back on computers, software etc.

However, you will have to charge VAT on your invoices and accounting fees may be higher.

peter

[km8]

Originally posted by spatny
Hi,

This is how i understand it.

If you have an EU vat number, you will not have to pay vat on your google invoice.

.... unless you live in Ireland.
If you do, you pay the VAT and reclaim it on your VAT return.

[spatny]

Hi,

Yes, Km8, you are right. I assumed Wardy was a UK resident.

Peter

[km8]

Originally posted by spatny
Hi,

Yes, Km8, you are right. I assumed Wardy was a UK resident.

Peter

Ahh, and I thought only our American friends made that sort of mistake

[binable]

Originally posted by spatny


If you have an EU vat number, you will not have to pay vat on your google invoice.

Peter

By an EU VAT number, do you mean for example a UK VAT number, or is it something different in addition to the UK VAT number?

Thanks in advance.

[ChrisM]

I think its just your VAT number with GB on the front.