VAT for Facebook Ads if company not VAT-registered

[Bart_LBS]

Hi all,

I'm running a non-VAT registered UK limited company. This month 2 of my clients asked me to run Facebook Ads for them and then invoice the Ads spendings with a profit margin.

After signing up for an Ads account on FB, it asks me for filling in VAT information, does it mean I should worry about paying VAT on the invoices even if I'm not VAT registered? Or should I just ignore this information?

EDIT: I already received the first invoice from FB and it says:
Customer to account for any VAT arising on this supply in accordance with Article 196, Council Directive 2006/112/EC.

What does that mean?

 

[Mr D]

You pay VAT when charged it. Same as you have all your life if growing up in UK.
You don't get to charge it to any customers until you register.

 

[Scalloway]

Customer to account for any VAT arising on this supply in accordance with Article 196, Council Directive 2006/112/EC.

What does that mean?

It means that VAT is zero rated and VAT registered businesses should account for VAT under Reverse Charge.

 

[TheCyclingProgrammer]

As above the services are accounted for under the VAT reverse charge (they aren’t zero rated though, they are outside the scope of VAT in whichever country Facebook is invoicing from, probably Ireland).

When a service is reverse charged the purchaser must treat them as if they’d both supplied and purchased the service themselves and account for input AND output VAT on the supply.

As you aren’t yet registered for VAT you do not need to account for anything but you DO have to include the value these purchases in your turnover for the purposes of the registration threshold, as if you had supplied them yourself. If you’re making a lot of these purchases you should keep an eye on them in case they tip you over the registration threshold.