swa66 - 12:07 pm on May 23, 2013 (gmt 0)
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).