Google Adsense VAT?

[NEF]

I run an online forum and get paid by google/adsense for adverts. This may be a stupid question but if I register for VAT, I know I pay VAT on the products I sell, but will I have to pay VAT for the payment google give me, its not like I'm selling a product or have I got this all wrong..

 

[Highland Spring]

Google Adsense is based in Ireland so this should be accounted for under the reverse charge rules.

Basically you add VAT to the income then take it off again as a purchase the net effect is no increase in VAT liability

 

[spidersong]

Just to clarify the prior: Google will account for it under the reverse charge rules. You'll only need to show it as a sale in your accounts and VAT return.

Google are the ones who will add VAT to their purchase from you and then take it off again. The 'charge' part of the reverse charge applies to purchases, the seller doesn't do anything except note on the invoice the purchasers VAT number (usually as the easiest proof of them being in business) and the fact that it's subject to the reverse charge. Except in this case Google will presumably sort all this for you when you tell them you've become VAT registered as I assume they 'self bill' all these supplies.

 

[TheCyclingProgrammer]

What spidersong says. Google are the recipient of the services here (they are paying you) so they will deal with the sale under the reverse charge and I also imagine they will operate self billing.

From your point of view it’s outside the scope of U.K. VAT. It still needs to be reported as a sale on your VAT return, UNLESS you’re on the flat rate scheme in which case you should not include it in your flat rate turnover.

Conversely if you ever buy a service from an overseas supplier (eg you pay for Google ads yourself) you would account for the sale under the reverse charge as outlined above by Highland Spring.

 

[Highland Spring]

I agree with TheCyclingProgrammer its outside of UK VAT scope but you still need to report it as part of your VAT return.

 

[TheCyclingProgrammer]

I agree with TheCyclingProgrammer its outside of UK VAT scope but you still need to report it as part of your VAT return.

That’s what I said. Except if you’re on the flat rate scheme in which case it doesn’t get included.