VAT For App

[Lewis Hanson]

Hi All

Hope you are well.

My startup is working on an app which will be free for consumers to download. We will be monetising via advertisements in the app as well as in-app purchases such as stickers/filters that sort of thing.

I understand that in one case my customers will be businesses buying digital advertising space. These will likely be businesses from the UK & the US and perhaps the EU. How would the VAT work in this instance whereby some will be VAT registered and others namely in the US will not be? (or would they be?)

Secondly with my second set of customers being non-businesses and therefore not VAT registered and also dispersed across UK, EU & US, would I just charge VAT on the price of said virtual items such as filters/stickers etc?

Thank You

 

[Mr D]

If you are VAT registered then you charge VAT as appropriate.
If you don't register for VAT you cannot collect it on behalf of the UK government.

 

[Scalloway]

VAT on sales of digital services in the EU (VAT MOSS)

https://www.gov.uk/government/collections/vat-moss-vat-on-sales-of-digital-services-in-the-eu

 

[billybob99]

Hi All

Hope you are well.

My startup is working on an app which will be free for consumers to download. We will be monetising via advertisements in the app as well as in-app purchases such as stickers/filters that sort of thing.

I understand that in one case my customers will be businesses buying digital advertising space. These will likely be businesses from the UK & the US and perhaps the EU. How would the VAT work in this instance whereby some will be VAT registered and others namely in the US will not be? (or would they be?)

Secondly with my second set of customers being non-businesses and therefore not VAT registered and also dispersed across UK, EU & US, would I just charge VAT on the price of said virtual items such as filters/stickers etc?

Thank You

I'd worry about this after your app is completed and you have a sh*t ton of downloads.

Nobody is going to advertise on your app with diddly squat users, if they are chancers they might take a punt, otherwise they'll want to see proper data and daily engagement metrics and all that good stuff.

I'd focus on building an app that works as expected and offers some sort of value to users so they keep using it.

Only then will you be in a position to offer ads.

I just hope you won't be putting ads on it from day one, otherwise expect to see a hefty uninstall rate.

Been in this game for 10+ years.

 

[lesvatadvice]

Where your advertising customers are outside the UK, you should not charge VAT, but will need EU VRNs and evidence of business status. For EU sales you will need to complete EC Sales Lists.
I think an hour with your Accountant of other adviser to work through the series of questions and how you will apply the guidance provided in this thread is essential

 

[TheCyclingProgrammer]

For any sales direct to consumers through the Apple App Store or google equivalent you won’t need to account for VAT as Apple are effectively acting as a reseller and will handle the VAT on end sales (contractually they are an “undisclosed agent”).

There’s a deemed B2B supply from you to Apple/Google which is outside the scope of U.K. VAT but I believe sales in the EU are handled by Apple (and maybe Google) based in Ireland so an EC sales list might be needed for these sales.