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Stardoe


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VAT Reverse Charge
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Hi everyone,

I have a question about VAT reverse charge.  One of my clients has a Yahoo marketing account which is a rolling account (i.e. he adds funds to it occasionally) and the invoice shows this funds addition and the current balance on his account.

Only the added funds show any VAT e.g. 60.00 plus VAT 10.50 Total 70.50 added.  The charges on the invoice are excluding VAT and no VAT is shown. 

At the bottom of the invoice it says that "The customer is liable to account for VAT on this supply of services under the reverse charge in accordance with the provisions of Article 196 of the VAT Directive 2006/112/EC"

I thought the reverse charge related to services/goods from other EU countries, but nowhere on this invoice does it state that Yahoo UK Ltd is anywhere other than in the UK.  The address of the registered office is in London and has a UK Company registration number.

Anyone any ideas?  smile.gif

Pauline

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Pauline
RobH


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Reverse charges are on services and vat is chargeable usually where the customer is based. I don't know about yahoon but lots of people accounting for vat incorrectly with google ads, becomes a huge problem for vat exempt types. i would thin perhaps the statement is added to all invoices as they presumably issue all over the EU and as such if its a uk based invoice going to a uk customer I would assume the vat is recoverable as input tax in the normal way. Hope I've understood properly!

Rob

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Rob
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Stardoe


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Hi Rob,

Many thanks for the reply. I understand what you are saying. I have emailed Yahoo regarding this and they said that VAT is applicable to all payments made to our account, which is fine as this is shown on the invoice. However the charges are shown exclusive of VAT and it is these I am wondering if they should have VAT on? Think I'll ring Yahoo and ask! smile.gif

We have Google adwords as well. Should these be zero rated?

Pauline

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Pauline
Stardoe


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Ok, well the very quietly spoken Irish girl at Yahoo UK said that I should add VAT to the clickthrough charges, so I shall be doing this from now on!

Pauline

-- Edited by Stardoe on Thursday 18th of November 2010 01:27:35 PM

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Pauline
Stardoe


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Update......Yahoo rang me back and told me they'd given me duff information! The VAT apparently is included in the amount we pay (60 + VAT 10.50 - 70.50) so I should not add VAT to the click charges.

If they don't know the answer, how are we supposed to?

Pauline

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Pauline
RobH


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Hi Pauline,

If it's from Ireland then it comes under the reverse charges, it's allto do with the place of supply rules which is basically where the customer is. If you are using sage you need to put reverse charge services (NOT GOODS) coded to T24 and this should get the vat return right!

However shouldn't Yahoo be just charging £60 without the vat. I would call them again to clarify this, it may be that they do not have your vat number which they would need to put on the invoice. To be honest it isn't something I have a lot of experience of but that is my basic understanding of it.

Rob

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Stardoe


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Hi Rob,

They're not in Ireland, just that the girl was Irish. Although she did keep talking about Euros until I corrected her and told her that the invoice was in GBP. Also the invoice has no address in Ireland, just in London and Worthing. Nowhere does it mention it's anywhere else other than in the UK.

They do have our VAT number on the invoice as well. Are you as confused as me Rob...lol

Pauline

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Pauline
RobH


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It is a bit confusing, but if its a uk company charging vat then it would seem you ust need to claim the vat back then...maybe...perhaps!

Rob

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Stardoe


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The client is on cash accounting for VAT as well which makes it more confusing. I will just account for VAT on the payment and take it from there, as that is definitely showing on the invoice!

Thanks for your thoughts Rob! smile.gif

Pauline

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Pauline
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