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Google GSuite VAT Question

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irfnz

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Sep 29, 2019
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I just noticed that gsuite has been billing me as a business and not charging vat on the gsuite email service. On the invoices it shows vat as £0

I’m not a business nor obviously vat registered. Do I need to pay this vat now?? Please help, I’m seriously confused and worried.
 
For them to not charge you VAT you would have had to provide a valid VAT number.
If you did then that was naughty of you.
If you didn't that is their problem as they are responsible for ensuring they collect the right VAT.
 
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Alan said:
For them to not charge you VAT you would have had to provide a valid VAT number.
If you did then that was naughty of you.
If you didn't that is their problem as they are responsible for ensuring they collect the right VAT.
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thanks for the reply, and I never entered any vat number but I read they can class you as a business and automatically switch for you? It’s put down my home address as a registered business address which I would never do. I’m really stuck on what to do. I also read online that they can class you as a business without you providing a vat number??
 
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It is still their responsibility to classify you correctly in terms of legality.

But now you know you are incorrectly classified what do you want to do about it. Is it a small amount of money or does it add up to a lot?
 
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Alan said:
It is still their responsibility to classify you correctly in terms of legality.

But now you know you are incorrectly classified what do you want to do about it. Is it a small amount of money or does it add up to a lot?
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I was paying about £8 per month but I’m not vat registered so how could I even pay it??!
 
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It will be Google's problem if VAT should have been charged but they failed to do so. In theory they could end up sending you a bill for the unpaid VAT but I think that is pretty unlikely.

I wouldn't worry about the unpaid VAT.
 
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Scalloway said:
It will be Google's problem if VAT should have been charged but they failed to do so. In theory they could end up sending you a bill for the unpaid VAT but I think that is pretty unlikely.

I wouldn't worry about the unpaid VAT.
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Thanks, I did ask them if they could send me an invoice for me to pay the vat I would've paid had they not marked me down as a business account but they said no. I'm just worried I'll leave it and then a few years down the line, I'll get asked to pay the unpaid vat via hmrc or someone with a hefty fine added to it
 
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Scalloway said:
It will be Google's problem if VAT should have been charged but they failed to do so. In theory they could end up sending you a bill for the unpaid VAT but I think that is pretty unlikely.

I wouldn't worry about the unpaid VAT.
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Pretty sure that it is in the TOS that the person using the service is responsible for the VAT in their country.

So your theory about them sending out a bill (if ever it is found out) is probably correct.
A ticking time bomb that will probably one day explode on people using Googles services.
 
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If you are not registered for VAT then it doesn't apply to you, you'd just pay the invoice including VAT amount. The reason the Google invoice is £0 is that G Suite's VAT is reverse charged which just means you add it to both the output VAT you need to pay HMRC as well as the input VAT you need to claim back which is net £0. The "reverse charge" is literally just the amount of VAT you would have paid on that service if you had bought it in the UK.

That help?
 
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Helpful Johnny said:
If you are not registered for VAT then it doesn't apply to you, you'd just pay the invoice including VAT amount. The reason the Google invoice is £0 is that G Suite's VAT is reverse charged which just means you add it to both the output VAT you need to pay HMRC as well as the input VAT you need to claim back which is net £0. The "reverse charge" is literally just the amount of VAT you would have paid on that service if you had bought it in the UK.

That help?
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appreciate the reply but shouldn't my invoice from google have stated a number as opposed to showing the vat section as £0. I think my problem is its classified me as a business even without supplying the vat number and so in my invoice theyve charged me with £0 VAT. I'm trying to find out how I can pay the VAT I shouldve previously payed
 
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No, £0 is correct, there is no VAT to pay as it's both input and output VAT net is £0.
 
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Helpful Johnny said:
No, £0 is correct, there is no VAT to pay as it's both input and output VAT net is £0.
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So even if i did receive the individual type invoice. It would've said £0 for the vat section?. I'm just an individual living at home who doesn't run a business. I believed that had it put me under as an individual, the vat section would've had the price I would pay already on the Google Invoice. I can't file the £0 VAT as I'm not vat registered, nor fill in vat returns.

Sorry for the headache!
 
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The bottom line is that it’s not your problem unless Google decide they should have been charging VAT and send you a retrospective bill.

I am surprised Google are treating this as a B2B transaction without you supplying a VAT number but it’s worth mentioning that strictly speaking a VAT number is not a requirement for a supply of services to be treated as B2B for cross border/reverse charge purposes although unless you’re an incorporated business I would have thought the assumption is that any non-registered individual is a consumer for VAT purposes. I thought Google requires a VAT number to not be charged VAT.

Sounds like a mistake on the Google side to me.
 
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TheCyclingProgrammer said:
The bottom line is that it’s not your problem unless Google decide they should have been charging VAT and send you a retrospective bill.

I am surprised Google are treating this as a B2B transaction without you supplying a VAT number but it’s worth mentioning that strictly speaking a VAT number is not a requirement for a supply of services to be treated as B2B for cross border/reverse charge purposes although unless you’re an incorporated business I would have thought the assumption is that any non-registered individual is a consumer for VAT purposes. I thought Google requires a VAT number to not be charged VAT.

Sounds like a mistake on the Google side to me.
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Thanks for the reply. I contacted Google asking if I could pay the extra I wouldve paid at normal individual consumer price and they said no. The only option I guess I have now is collecting the invoices and finding out how I can pay the VAT to the HMRC if thats actually possible?? But I'm not sure that would be possible.

I'm just scared I'll get a letter in the post a few years later asking me to pay an old bill with a crazy fine added to it.
 
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Google pass on the risk in their Terms of Service.

"If Google is obligated to collect or remit Taxes imposed on the Customer, the Taxes will be invoiced to the Customer"

They don't include a timescale for this, so if HMRC go after Google for the tax, I assume Google will then just go after the customer for it (plus any penalties and interest)

Edit to add source: https://gsuite.google.com/terms/2013/1/premier_terms.html
 
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UKSBD said:
Google pass on the risk in their Terms of Service.

"If Google is obligated to collect or remit Taxes imposed on the Customer, the Taxes will be invoiced to the Customer"

They don't include a timescale for this, so if HMRC go after Google for the tax, I assume Google will then just go after the customer for it (plus any penalties and interest)

Hmm, how would you recommend I can rectift this problem. I've phoned Google asking if I can pay the price difference for the past months that I would've paid as a consumer but they said that it's not possible. Would my next step be to phone HMRC and discuss the problem???
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Hmm, how would you recommend I can rectify this problem. I've phoned Google asking if I can pay the price difference for the past months that I would've paid as a consumer but they said that it's not possible. Would my next step be to phone HMRC and discuss the problem???[/QUOTE]
 
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Google services are based in Ireland (not UK so not HMRC) so reverse charge rules apply. However reverse charge rules only apply if supplying a business. That is why their TOS state you can only use the service as a business.

Otherwise they would have to charge VAT within the country they are supplying the service and partake in the VAT MOSS scheme. The TOS allows them to state the services are for business use only so they avoid VAT MOSS.

Potentially HMRC could go after them for this but it would be expensive and difficult to prove consumer usage since the TOS only allows for business use.

VAT MOSS was introduced to target the likes of Amazon and Google and Google get around it with TOS and instead it is the smaller businesses who are screwed.
 
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andygambles said:
Google services are based in Ireland (not UK so not HMRC) so reverse charge rules apply. However reverse charge rules only apply if supplying a business. That is why their TOS state you can only use the service as a business.

Otherwise they would have to charge VAT within the country they are supplying the service and partake in the VAT MOSS scheme. The TOS allows them to state the services are for business use only so they avoid VAT MOSS.

Potentially HMRC could go after them for this but it would be expensive and difficult to prove consumer usage since the TOS only allows for business use.

VAT MOSS was introduced to target the likes of Amazon and Google and Google get around it with TOS and instead it is the smaller businesses who are screwed.
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thanks, what would you recommend me to do at this point?

they do also supply normal people as they told me on the phone that I should’ve selected the individual option when signing up?
 
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HMRC will not give a fig about your problem, unless you're looking to accuse Google of massive corporate fraud because you think they're doing this with all private customers! you have no debt to HMRC and there's no mechanism for HMRC to charge you anything or for you to pay them anything.

HMRC will never come looking for the money directly from you, this is purely a contract issue between you and Google, and I don't see any way Google could enforce any onward passing of interest or penalties, their contract only seems to mention the actual tax and any penalties are due to their cockup not yours. Also if this is an individual case they're unlikely to even need to declare it as an error to HMRC if they do notice, as the separate declaration of errors only begins at a £10,000 mark and for Google will be the £50,000 mark. That's not to say they don't need to correct it it's just they don't need to tell HMRC they've done so and they won't have interest or penalties on it.

So the worst case scenario is that Google come back and say 'oops we've noticed we should have charged you VAT here's an invoice' no one will ever chase you from HMRC or any government department for this. And if Google do come back then I'd say it's going down the complaint route setting out how many times you've talked to them to get them to correct their mistake and telling them to write it off as the liability here seems to be squarely on their shoulders.

If you're really worried then I'd suggest getting a pot and putting 20% of the invoice value in there each month so you've got the money set aside, or perhaps cancel the contract and renew it as a personal user.

Although I must say I'm not sure that GSuite is configured for personal use anyway it seems to be business oriented collaboration tools attached to their free office suite. I can see why they assume anyone using it will be in business and may have agreed that with HMRC as an assumption anyway.

And as a final point looking online Google seem to set a single price point for levels of GSuite subscriptions so the argument would be that you are paying a VAT inclusive price anyway as that's the single price they advertise whether in business or not, it's just that with personal users they get a lower profit margin - but I would check that their terms allow for personal use of GSuite.
 
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spidersong said:
HMRC will never come looking for the money directly from you, this is purely a contract issue between you and Google, and I don't see any way Google could enforce any onward passing of interest or penalties, their contract only seems to mention the actual tax and any penalties are due to their cockup not yours.
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Read the summaries section of the TOS
"'Taxes' means any duties, customs fees or taxes (other than Google’s income tax), including indirect taxes such as 'goods and services tax' and 'value-added tax', associated with the sale of the Services, including any related penalties or interest."

Source: https://gsuite.google.com/terms/2013/1/premier_terms.html

Google are experts at passing the buck, their whole business model is based upon it, publish content but accept no liability for it and hide behind Safe Harbor and the fact their lawyers are bigger than anyone else's.
 
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UKSBD said:
Read the summaries section of the TOS
"'Taxes' means any duties, customs fees or taxes (other than Google’s income tax), including indirect taxes such as 'goods and services tax' and 'value-added tax', associated with the sale of the Services, including any related penalties or interest."

Google are experts at passing the buck, their whole business model is based upon it, publish content but accept no liability for it and hide behind Safe Harbor and the fact their lawyers are bigger than anyone else's.[/QUOTE

what would you recommend I do at this point? I’m cancelling my account anyway
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UKSBD said:
Nothing
maybe put the equivalent amount away in a high saving account, apart from that I wouldn't worry about it.
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thanks, I’ve literally only spent about £150 pounds across my gsuite accounts so it’s not even much I would’ve paid, especially now I’m cancelling it. I could perhaps try contacting the google finance department through a letter and see if I can pay any amount. Aside from that I guess I’ll leave it then. Thanks for the help
 
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andygambles said:
Google services are based in Ireland (not UK so not HMRC) so reverse charge rules apply. However reverse charge rules only apply if supplying a business. That is why their TOS state you can only use the service as a business.

Otherwise they would have to charge VAT within the country they are supplying the service and partake in the VAT MOSS scheme. The TOS allows them to state the services are for business use only so they avoid VAT MOSS.

Potentially HMRC could go after them for this but it would be expensive and difficult to prove consumer usage since the TOS only allows for business use.

VAT MOSS was introduced to target the likes of Amazon and Google and Google get around it with TOS and instead it is the smaller businesses who are screwed.
Click to expand...

I've always wondered if this whole "We only supply businesses - look its in our TOS - so we don't need to worry about VAT MOSS" approach would fly with HMRC. Presumably they think they can get away with it because of how big they are.

Personally I'm not convinced that pointing to your TOS only permitting business customers is enough to say that it's a B2B transaction but I guess it's a creative way of getting around it...

As I said earlier though, this still isn't OPs problem. If Google wants to treat them as if they are a business (and I suppose technically OP is in violation of the TOS) and not charge VAT that's down to them. Reverse charge VAT is only an issue if you're a business and OP is not. IMO the worst that could happen is that Google suspends their account for a TOS violation.
 
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irfnz said:
they do also supply normal people as they told me on the phone that I should’ve selected the individual option when signing up?
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Was there an individual option? If so, what option did you select? It's possible that if you sign up as an individual/non-business that Google do charge VAT correctly. I'd forget it personally.
 
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No
TheCyclingProgrammer said:
Was there an individual option? If so, what option did you select? It's possible that if you sign up as an individual/non-business that Google do charge VAT correctly. I'd forget it personally.
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I assumed I woudlve pressed individual had I been given the chance, however I'm not even sure I was offered the option. I thought Google could only class me as a business had I provided a vat number. Though they took my home address and marked it down as a registered business address. It's bizzare though because alot of people will be business using the service but not vat registered since so many small businesses have custom email names.

I guess my only option now is to leave it and if google to ask me for the money in a few years, I can say I offered to pay it before but they said I can't. I just want peace of mind for this genuine mistake.
 
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I doubt it would ever come to that, but like I said earlier, Google have tried to cover themselves by passing the buck to the customer.

I just wouldn't worry about it for the amount you talk about.
 
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UKSBD said:
I doubt it would ever come to that, but like I said earlier, Google have tried to cover themselves by passing the buck to the customer.

I just wouldn't worry about it for the amount you talk about.
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I appreciate the help so much and the peace of mind. Same to all the other commenters. You have given me peace of mind and I can finally get back to concentrating on uni work!

Thanks alot!
 
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