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Given that Irish VAT was charged from over a year ago and at 21%, there are many, many people that are now due refunds running into thousands, even tens of thousands of dollars.
Technically everyone receiving a refund should then declare their spend and pay the correct VAT but I would expect many people to conveniently forget to do this and just spend the refund on something a bit more exciting ;-)
Technically everyone receiving a refund should then declare their spend and pay the correct VAT
I don't think that is correct: whether you are VAT registered in the UK or not, if an organisation from outside the UK does not charge you VAT on a product or service, there is no obligation (or indeed mechanism) to pay Customs and Excise any VAT you have not been charged. I checked this with my accountant. Its ours to keep!
For example, let's say I purchase a camera from a US seller. They don't charge me VAT but when it enters the UK I am liable for VAT at the standard rate.
Obviously Adwords are slightly different as the 'product' is intangible but I think this might be one of those 'grey areas'. Certainly Google were of the opinion that local VAT should be paid - mind you, what do they know, they have been charging incorrectly for almost two years :-)
I may be wrong and either way, I won't be offering my refund on a plate to C&E - if they want it, they can come and find me :-)
It is only VAT charged at the Irish rate of 21% that will be refunded and I believe that this was only charged from Jan 2004. This being the case, I am afraid you won't be getting back the VAT you paid in 2003.
What I'm trying to understand is
a)what % of UK advertisers' spend since 1/2004 is going to be refunded by Google; and
b)what % of UK advertisers wil get the refund
Any help is greatly appreciated.
If you are a UK VAT registered business and have always self-assessed for VAT on your Adwords expenditure (ie. haven't ever paid VAT on your ad costs), this won't affect you as there is nothing to refund.
If you have not self-assessed and have paid VAT at the Irish rate then you should receive a refund.
All affected advertisers were emailed back in July but if you wanted to check whether you are affected or not just drop Google an email....
In response to your query I have contacted our Payments team on your behalf and they have informed me that there is currently a delay in the processing and issuing of these cheques. Unfortunately this delay is out of our control and we are currently working with our tax advisor's in order to process all the VAT refund cheques as quickly as possible.
I apologise for this inconvenience and I assure you that you will receive your cheque in the coming weeks as soon as this delay has passed.
Thank you for your patience and understanding with this issue.
Not totally satisfactory, but all we have. The challenge is thatit was not lawful for themto charge this money in the first place. However those who are saying "Google is gettingthe interest in this money and I want it" are unlikey to be right. The money is likely to be with the Irish VAT people where it has been sent incorrectly. Doubtless Google is trying to sort out with them why it levied it in the first place and why it rendered it to them. It is quite a major misundertanding of the VAT system, and was not hard to get right in the first place.
Note that my understanding is that only businesses who are not themselves VAT registered will receive a refund, and that they wil onoy do so if they have followed the instructions in Google's email (or ask support again what they must do).