Mirago and VAT

An excuse to increase prices by 17.5%

[Ross]

Just had an email from Mirago (a little known and hardly used UK PPC engine) regarding the latest EEC ruling re charging VAT on ads shown inside the EEC. It seems that their prices already included VAT at the standard rate of 17.5% (they're a British company so had to charge VAT), but to standardise their offering and "allow fair bid comparison with their competitors" they are going to add a further 17.5%.

I've emailed them to offer them the two alternatives of either reducing my bids by the VAT amount or closing the account. To be honest I don't mind which alternative they choose.

Would all of the people wanting to enter Rip-Off Britain please form an orderly queue.

[max_rk]

It is sad that they've taking this route. My brain does not understand how can you charge VAT twice.

Mirago should think about this hard or they will start loosing customers. Mirago maybe not the biggest search engine in the UK but any competition in UK search engine market should be welcomed.

[richardb]

Thanks for that Ross, saves me having to include that 1 in the equation. I can’t wait until we join the Euro :(

[gsx]

And if they add it twice, can you claim it back twice? I don't think so.

You could report them to customs and excise as soon as they add the amount on twice and let them investigate further (after all customs will want the amount they charged, so Mirago will be no better off!).

[tosspot17]

This confuses me no end.

First, Google Adwords keeps asking me for my VAT number every time I log on, even though i've already given it to them, now Mirago wants to charge me VAT twice.

The world's gone mad!

[Ross]

They emailed me back offering to reduce all of my bids to remove the original VAT portion i.e. divide my bids by 1.175 and then round down to nearest penny.

I accepted their offer of course.

Max_rk, I agree that we need all the help going but that was a very nasty trick that they tried there. They could just as easily have reduced all of the bids to remove the VAT content so that it could be added afterwards as is normal with VAT. If they'd done that they would have still received the same income as they currently get. The method that they've chosen will effectively increase their income by 17.5% using a very underhanded method.

[Mirago_02]

Mirago are purely going for VAT exclusive accounting and are certainly not double charging VAT. The point is that in the EU (not the UK) you do not charge VAT if the EU based advertiser is VAT registered in their own country. As we have launched indexes in France, Germany and Spain, VAT exclusive accounting is a pre-requisite. (The UK would follow suit if it becomes a full EU tax member). We have technically made a small increase from an effective 8.5p to 10p in their minimum bid price as the 10p formerly included VAT, but all other bids can of course be adjusted down or decisions of what new prices to bid can be made in the knowledge that bids exclude VAT (like the other ppc engines). The whole point of the bidding mechanism is that it is a free market, bids are always changing and find their own level. We therefore have no ability to 'increase prices'.

If we go for full EU membership things will get even more complicated with differing VAT rates per country.

[Shak]

mirago 02,

Welcome to Webmasterworld [webmasterworld.com]

Glad to have you on board, is Derek still around?

Shak

[Mirago_02]

Thanks Shak
Yes he is still around ;o)

[Mirago_02]

FYI

For information, the following article details some of the issues of the VAT headaches of doing business in Europe:-

[internetnews.com...]

[Bobby_Davro]

I didn't even realise that Mirago had included the VAT in the 10p minimum anyway.

Ross,
Mirago does get a reasonable amount of traffic. They aren't a "big" player, but they are top of the second layer of engines in the UK. Plus they have their own search index, which is a major bonus.

They also have a few partner sites now as well:

Ask Jeeves
Dogpile UK
UK Net Guide
Wahooma!