You should use a business account.
It's impossible to convert a personal account to a business account. The procedure calls for deleting the old account first (and removing all ads), and then applying for a new account and putting new ads on it.
Those who have 2 seperate legal entities can get around this by holding a personal and a business account in their business name. Even if just for the transition. If you don't have 2 separate legal entities, I'd suggest to follow the official procedure. [you mention being self-employed, which smells to me like no separate legal entity]
VAT is easy: you do not charge it and Google does not pay it. You also do not need to create a pro forma invoice in most locations that I know. Talk to your accountant! I just print out the online google documents (both the monthly statement they have and a corresponding overview with the daily revenue) and put that in along my normal invoices. The accountant books it as a commission the business received.
There's no need for a VAT correlation as there's no VAT due between businesses for this kind of service.
Those in Ireland have a separate arrangement with Google: they do need to charge VAT, send invoices and Google does pay them VAT (Like any other local transaction).
Thank you for your reply SWA. I have considered applying for a business account. However, my current Personal account is a very old one and I would hate to start over with a new one, building trust with Google and so on. I suspect seniority can play a role when dealing with click fraud for example. Moreover, as a self employed person I guess I fall somewhere in between as far as account type because my name is the business. You are right, there aren't two entities in my case.
|You should use a business account. |
Do you think that a business account is mandatory for self employed?
I switched to a business account in 2009 or 2010, can't remember which, and I never had any problems with building trust or fraud. And I've made more money every year I've been in AdWords.
Thank you MEG. Do you have a corporation or are you self employed as well?
I have been researching this and it seems that there is no difference between personal and business accounts, except for the name of the payee in the case of publishers using a separate business entity (corporation for example). In my case, if I apply for a business account, all my details would be the same including the name of the "business".
Sorry to keep raising the same issue, but I do not want to make this change just for the sake of it. I am certainly running a business even if I am self employed, but then again, aren't those with a personal account required to pay taxes on the money earned from Adsense? And isn't that called doing business?
There's actually little difference left and even my (business) account doesn't say anymore it's a business account.
Beign self employed, I think you'll be fine with your personal account for now. Future: nobody knows. Just be ready that you might have to change some day.
Taxes: well it depends on where you live, but in most countries that have a VAT system you're quite likely to have to pay taxes on revenue. If you earn more than peanuts, I'd not risk not declaring the income. In the end Google does report their expenses in Ireland, and all your local taxman has to do is talk to the Irish taxman to get a complete list of his subjects that should have declared income ...
Depending on where you like the limit of up to where / how frequent you can earn income as a private person without becoming self-employed varies. At least in some countries it's really not smart to go over that limit.
|Beign self employed, I think you'll be fine with your personal account for now. Future: nobody knows. Just be ready that you might have to change some day. |
True, this is what I was thinking - only Google can at some point set a maximum amount that can be earned under a personal account. As far as my tax authority is concerned I don't see how they can differentiate between personal and business accounts. As long as I pay my taxes they shouldn't even care what account type I have.
Just to clarify - I have been an Adsense publisher for several years.
|Thank you MEG. Do you have a corporation or are you self employed as well? |
Both - Netmeg, Inc. is a corporation.
Obviously, I still have to pay taxes and all that. I just have to use a tax-id number instead of a social security number for Google (and other places that pay me money). I did it because my accountant advised once I got to certain earnings level that taxwise and liability-wise, it would be better to put all the web publishing into a corporation, and deal with it separately. And it cost less than a hundred bucks to incorporate. And it is kind of nice to have it all separate from my "day job" (which is another corporation that I'm CEO of, so I am paid as an employee)
There is also the advantage that if you registered are with adsense as a business..that each business ( it being a separate legal entity ) can have it's own adsense account..