We recently reviewed your AdWords account to make sure that its
VAT setting is correct. It was indicated previously either
that your account was intended for non-business purposes or you
have not entered a VAT ID. We therefore have assessed VAT at
the Irish standard rate (currently 21%) and added this amount to
your AdWords charges. During our review, we determined that
your VAT setting was incorrect. Your AdWords account is, in fact,
used for business purposes. This means that it is used to
gain an economic advantage by promoting goods or services on
Google AdWords. Note that the vast majority of advertisers use
AdWords for business purposes, including corporates, affiliates,
sole traders, self-employed merchants, partnerships, etc.
As a result of this discovery we have switched your VAT setting
and will no longer add Irish VAT to your AdWords charges.
You are now responsible for self-assessing VAT at your country's
local rate (Ref: article 194 of Council Directive
2006/112/EC).
Without sounding like a complete numpty, when I get the cheque, am I meant to be giving it to the government?...
Without sounding like a complete numpty, when I get the cheque, am I meant to be giving it to the government?...
Going forward, all this means is there is no VAT for you to claim back (from the government) in your quarterly VAT returns. That's because they are not charging you VAT.
Looking back, ask Google for a refund on all the extra VAT you paid them when they were charging you 21% extra. That's what I did. When you get this cheque the money is yours to keep.
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Procrastination guru
Last edited by ep90; 31-05-08 at 01:41 PM.
Reason: Added footnote
Going forward, all this means is there is no VAT for you to claim back (from the government) in your quarterly VAT returns. That's because they are not charging you VAT.
They are charging you VAT, but it comes out in the wash when you do the return. You 'owe' 17.5% VAT on your adwords spend, and then claim it back on the same form. I think it's box 2 where you put "VAT due but not paid" on your VAT return. Check with an accountant though. HRBS will no doubt put this issue to bed.
Going forward, all this means is there is no VAT for you to claim back (from the government) in your quarterly VAT returns. That's because they are not charging you VAT.
Looking back, ask Google for a refund on all the extra VAT you paid them when they were charging you 21% extra. That's what I did. When you get this cheque the money is yours to keep, it's not a taxable income either as it's a refund.
The refund is taxable as it is a part refund of advertising costs you have already claimed as an expense in your accounts and is therefore a reduction in your advertising costs. It may be that your accounts will then have negative advertising costs as the Adwords refund may exceed your other advertising costs. You will need to explain this to your accountant (if you use one ... why they didn't advise you on Adwords and VAT?).
ep90: You cannot reclaim Irish VAT in your UK VAT return. If you have done so then you should recheck your VAT returns as HMCE will pick this up when they visit you and will charge interest and potentially penalties
I have not claimed Irish vat back or even suggested it?
Quote:
Going forward, all this means is there is no VAT for you to claim back (from the government) in your quarterly VAT returns.
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