Vat

[robmorgan]

Hi all,

I run a small UK site which serves purely to generate credit card applications, for which I get paid commission.

To generate traffic to my site, I use Google Adwords and Overture, who charge me VAT on every click.

Does anyone know if I'd be eligble to register for VAT, and if so, whether I'd be able to reclaim the VAT I've paid to Google and Overture?

Thanks,

Rob

[UpDown]

Yes, since you are running this as a business you should be able to register for VAT. You will then be able to claim back the VAT from Gooogle and Overture. If you are working through an EU affiliate scheme you need to inform them so they will pay VAT on top of your normal commissions. You then apss on the VAT to the VAT man.

In fact with Google, if you have a VAT number they don't charge you the VAT, so there is nothing to reclaim. You save 21% on the Google cost, but have to send the VAT on the income to the VAT man every quarter. Overture is more normal, they charge you VAT which you then deduct from your quarterly VAT payment.

Don't forget you can also then claim back the VAT on any other business expenses.

[robmorgan]

Thanks for your reply UpDown.

So, if I were to register for VAT, Google would stop charging me VAT and I would be able to claim back the VAT I pay to Overture.

Would I then *have* to start charging VAT to my customers? Any idea how that would work if my customers are Commission Junction advertisers? As far as I can tell, the commission rates are fixed, irrespective of whether or not I'm VAT registered.

[fasteddie uk2001]

As far as I know you will then have to charge VAT for goods and services you supply to people. Once of the advantages of registering is that you can claim back VAT on the previous 3 years worth of business purchases, and previous 6 mths of business services.

Don't forget you have to register for VAT within 30 days of passing the VAT threshold over the previous 12 months - about £56K I think currently.

f

[UpDown]

You have to charge VAT on services rendered in the UK. If you use a UK program such as TradeDoubler then they pay you the VAT on top of the normal commissions.

However CJ is US based so your services are considered an export so VAT is not chargeable. This is beyond my experience, either ask an accountant or phone the VAT general enquiry number and ask them whether you can claim back input tax if all your business is outside the country. There is a forum at the startups site where a UK accountant offers lots of guidance. Sticky me if you want the web address.