Not registered for VAT, expecting pay from marketing efforts

[cosmoglobe]

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Hi,
One of my company I am doing affiliate marketing for just pay there affiliates. THey asked me if I am vat registered and the name of my company. However I am not registered as selfemployed nor vat registered, so what should I tell them? Can I not just tell them for now that I am selfemployed, and then later on I will register as selfemployed, or is it essential that I am vat registered or even registered as selfemployed?

Can anyone enlighten me on that issue?

Thanks very much,
Cosmoglobe

[hrbs]

Hi

A quick note ...

It is essential that you register as self employed ASAP - there are various posts on this forum (eg http://www.affiliates4u.com/forums/g...how-start.html ) or at Thinking of starting a business? | Business tips from High Royd Business Services Limited .

If you do not register with HMRC within 3 months of starting to trade then they will fine you £100 . As networks pay usually 2 months in arrears, then you effectively started trading 2 months before your first payment. Check out the above links for details of costs you can deduct against your income and if you make a loss you can claim a tax refund (assuming taxable income from elsewhere eg day job).

With regards to VAT, you cannot charge VAT unless your are VAT registered, the networks will however pay you excluding VAT. For more info for VAT and affiliate marketing go to VAT on Adwords Expenditure which also covers general VAT for affiliate marketeers.

I would strongly suggest that you open a separate bank account for your AM activities to keep your business affairs distinct from your personal and also a separate credit card.

If you use Adwords, make sure you register with them as a business and not an individual, as businesses are not charged VAT (see above article for explanation). If you are registered with Adwords as an individual, change your registration to a business and request a VAT refund.

Good luck!

Keith
High Royd Business Services Limited
Small Business and affiliate marketing specialists