Article 196, Council Directive 2006/112/EC

Hi Phil

Yes, I'm still alive! This is where legal requirements and real-world practice might collide.

In short, yes it's still the case.

In law, advertising services are still Reverse Charged to businesses in different countries. The test of whether you are a "business" is whether you are a "taxable person" (not necessarily a company/individual registerd for VAT, but one who could be registered for VAT, or is at least carrying out an "economic activity" ... which means not simply holding assets, but trading goods or supplying services).

But in practice, suppliers have frequently got it in their heads that they must have the customer's VAT registration numbers in order to record the sales in their new EC Sales Lists for services. But it is not the case in law, so you might have to argue with them and show them VAT legislation to convince their VAT department otherwise. Though I must admit, I am not familiar with how accurate Facebook/Google Adwords are on this issue - hopefully they are more aware than most and will get it right!

In summary, if you are not VAT registered, but you are still in business, the supplier should charge you no VAT at all. You should add these "Reverse Charged" purchases to your UK sales totals to see whether (in any rolling 12-month period) you have exceeded the UK VAT registration threshold and must re-register for UK VAT. If you are still under the threshold, you can remain unregistered and no VAT is ever accounted for on the transaction!

Hope that helps?