CJ VAT situation

**Wardy** · 03-02-05

Just been speaking to my accountant and searching through the forum about the good old "CJ VAT" issue.

By the looks of it everyone is still doing different things with it, some are being forced to pay, others aren't.
Does anyone have nay new or relevant information about it?

Just looked at last cheque, it was in £'s and sent from the London office I think.

So what's the latest things everyone does with CJ then?

Cheers
Wardy

**Wardy** · 10-02-05

That no one then?!

Cheers
Wardy

**smn2** · 10-02-05

I have it as non-VAT (or zero rated or VAT exempt or...), but
I don't earn much from CJ so it's not gonna kill me if I'm
wrong!

Steve

**Luca Brasi** · 10-02-05

CJ activity is definately non-vat.

If merchants activity on CJ is within the bounds of UK VAT (as lots will be) then VAT is applicable on the activity.

However, As CJ are a US company and are deemed only to have an office in the UK they do not charge VAT or, more importantly for us, pay out VAT on our commissions.

In a previous life I worked for a merchant on CJ. We made voluntary declarations to the Inland Revenue and paid the VAT due on the activity direct to the IR rather than to CJ.

**999gi** · 10-02-05

I make sure my invoices have a US address on them

**simon147** · 10-02-05

Who do you send the invoices too 999?

They pay us direct without needing invoices.

**999gi** · 10-02-05

I dont - they are just for internal purposes
Everyone needs to have an invoice for every bit of income they receive - either
- a "self bill" - like most of the networks
- an invoice you issue - like you need to do to get by most Indis
- an invoice for internal purposes when one of the above 2 cant be done

**renegade** · 11-02-05

I create invoices to the US address, I don't send them.
I'm zero rating it. I showed the CJ stuff to the VAT man when I registered for VAT and he took away some copies to follow up.
He never got back to me so I've carried on doing what I'm doing. I haven't been inspected yet though.

**999gi** · 11-02-05

Joe - Im not sure but I dont think you mean "zero rate"

Zero rate means it is subject to VAT but the rate is 0% (like food and books and other of lifes essentials). This means that the gross transactions would go on your VAT return but there would be no impact on the VAT payable

Invoicing the US I believe makes something "outside the scope of VAT" meaning the transactions are completely ignored for VAT purposes.

Theres also "exempt" which Im not quite sure about - I think that means it should be VAT able but because of some circumstances you can ignore it.

**dbm44** · 11-02-05

I phoned the National advice line when I first registered for VAT and having explained the CJ situation, advertising for UK companies but invoicing and paid from the USA, I was advised that they were "outside the scope of VAT".

Both they and I have a record of this conversation should the VAT man ever query this during a visit.

**renegade** · 11-02-05

Originally posted by 999gi Joe - Im not sure but I dont think you mean "zero rate"

No I didn't, apologies for the confusion.

**Zanox** · 30-06-05

One of the problems that you should consider is whether you are right or wrong on the issue of VAT you need to look at the consequences of a VAT inspection, many times VAT inspectors themselves have been wrong and only proved wrong once goods and assets have been seized. Obviously this doesnt related to many but some of you affiliates earn in the tens of thousands and a less than qualified inspector has all the power in the world when it comes to getting money.

With respect to being told by a tax man or central office the situation and keeping notes and records, at best all that will do is win you some good will. In a case where you have been given false advice it still does not escape the fact that there is dutry to be paid and once identified they will pursue it.

I dont think its a big problem but affiliates should contact the tax office not via central phone, it does take just a few hours to visit a local tax office and explain it in detail with regards to all networks, not just cj or ourselves for that matter.

I think this is important so will see what i can dig up as well on this subject, i think from our point of view is its not the tax law that has ever been an issue, its always been a tax inspector/advisors interpretation of the law.

Regards to all

**purple** · 19-01-06

Originally Posted by 999gi

Joe - Im not sure but I dont think you mean "zero rate"

Zero rate means it is subject to VAT but the rate is 0% (like food and books and other of lifes essentials). This means that the gross transactions would go on your VAT return but there would be no impact on the VAT payable

Invoicing the US I believe makes something "outside the scope of VAT" meaning the transactions are completely ignored for VAT purposes.

Theres also "exempt" which Im not quite sure about - I think that means it should be VAT able but because of some circumstances you can ignore it.

When you say ignore for VAT purposes, what do you fill in on your vat return, my accountant says as I have not put the income from "outside of the scope of vat" on my VAT returns, my corporatation tax revenue will differ from the vat return income and will open me up for investigation.

how do others deal with this.