VAT registered

[Philox]

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Hi,
I am just starting to dip my toes into affiliate marketing and wonder if my new company should register for VAT. I would appreciate any advise on this as I believe commission is non VAT payable

[Travel Pixel]

If you are running a business from the UK and you make supplies (advertising services in this case) or purchases in the UK then of course there is VAT to pay if you are registered.

However, you dont HAVE to register if your turnover is below the VAT threshold of about 63000 (check exact figure).

Dave

[Barry]

I would recommend registering for VAT under the flat rate scheme if your earning under (check figure) £225,000 and you are not spending much on outgoing VAT.

The flat rate for an advertiser is 10.5% VAT and with the 1% off they do for the first year you only have to pay 9.5% of your total income in VAT.

You can still invoice VAT at 17.5% so you get to keep the rest

Ta

[Philox]

Cheers Guys,

Thanks for the info. i take it from that, I will have to register if there is a turnover of £65000 ish irrespective of anything else

[befuddle]

I would recommend registering for VAT under the flat rate scheme if your earning under (check figure) £225,000 and you are not spending much on outgoing VAT.

The flat rate for an advertiser is 10.5% VAT and with the 1% off they do for the first year you only have to pay 9.5% of your total income in VAT.

You can still invoice VAT at 17.5% so you get to keep the rest

Barry, this is the answer to the question that I hadn't yet posed. My accountant wanted to know if people in my type of business are VAT registered and if so, are they on the flat rate scheme as an advertiser.

I am so borderline that I am either about to top the threshold this/next month or I have already tipped over the threshold in February (need to go through my accounts to confirm).

Either way I need to do something fast.

[Barry]

No probs Ray.

Def worth registering sooner rather than later even if you havn't got to the threshold yet. If your under the right brackets you can actually get paid by the tax man for collecting VAT

TA

[DioBach]

Either way I need to do something fast.

Do it before. I made the mistake of leaving it right to when I hit the threshold, then by the time I got my VAT certificate back, it was backdated to the start of the previous month which meant a nightmare in paperwork backdating everything.

Also, if you've spent a lot on equipment and VAT charging services the last year, you can register for the normal VAT thing first, and get the 3 years of equipment and 6 months of services VAT backdated. Then after your first return (as you can only claim the backdated stuff back on the first return) you can apply for the flatrate scheme.

I actually applied for it but it didn't go through in time, so as I'm doing my first one the normal way I can backdate that stuff, which is nice.

[Barry]

Yeah I left it for over 5 months when i went over the VAT limit and had to issue backdated VAT invoices to all networks. This took alot of time - but every network I paid - thank god.

Ta

[kevforth]

For anyone about to breach the Threshold it would be an idea to get on a VAT course run by the nice people themselves. Have just been on one and found it really usefull.

[hrbs]

Hi

Don't forget that if you use Adwords, under the Reverse Charges Rules, your Adwords spend counts as turnover for the VAT registration threshold (reverse charge means that you are treated as supplying the service to yourself).

See my articles at Adwords And Your VAT ReturnBusiness and accounting tips from HRBS Accountants (threshold is now £67k).

Regards

Keith
Fixed Fee Accountants and Tax, VAT, Payroll Specialists providing proactive, professional service to small businesses - HRBSaccountants.com

[retrolink]

I would recommend registering for VAT under the flat rate scheme if your earning under (check figure) £225,000 and you are not spending much on outgoing VAT.

The flat rate for an advertiser is 10.5% VAT and with the 1% off they do for the first year you only have to pay 9.5% of your total income in VAT.

You can still invoice VAT at 17.5% so you get to keep the rest

Ta

Regarding "keeping the rest", the extra should be taxed as income - just something I remember from an HMRC VAT seminar...

I think the flat rate limit may be a level of £150,000 taxable turnover, but not completely sure...

[Matt.Lovett]

Hey,

I can only see benifits with registering for VAT anyway. Stupidly I did not do it either till I hit the VAT threshold and then I had to go to every single company and ask for the vat and send copies of VAT certificates to prove when I became registered etc - not fun!

Flat rate scheme is the best, unless of course you have a lot of outgoings that you pay VAT on, but if you are paying companies that do not even charge VAT then theres nothing to claim back from that transaction. It all depends on your business really.

Matt