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Nope – being VAT registered means you only have to act as a tax collector on income from within the UK itself. You will probably find most of your affiliate income comes from offshore so I would suggest not registering unless you have to (Ie: go above the 50k threshold or whatever it is these days). The downside is that you can’t reclaim VAT on goods you buy in the UK and put through your company, but unless thats high value it’s still worth not being a government tax collector. Been there – and its a total pain in the arse.
I’d agree with Simmo on those facts – but come to the opposite conclusion.
:tongue:I’ll explain.
Down here we have GST (which is just like your VAT) set at 12.5%These days I bill EXACTLY ZERO domestic companies for my services.
But I still spend between $30K to $40K locally per annum.So by registering for GST – all business purchases are eligable for a complete refund of GST paid. That’s going to be about $5K back in my hand.
:santa2:Basically by opting out – you’re agreeing to pay a VAT tax for domestic purchases that YOUR COMPANY DOES NOT NEED TO PAY.
Think about all your local spends:
– PC’s and telco equipment
– Internet charges
– Utility bills
– Accountants fees
– Car Lease
– Office RentAs with all tax issues it is best to consult local professionals – but I’ll be amazed if they don’t say IMMEDIATELY SIGN UP!
:hattip:Yup – if you spend a lot, there’s some sense in it, but the paperwork, fines and timescales are a PITA over here IMO.
I agree with TheGooner,
also when you are not spending a lot…..Thanks for the feedback. My accountant has advised I register for VAT for exactly the reasons stated, especially as I do spend a lot on marketing each month and it all attracts VAT. What my accountant failed to clarify to my satisfaction was the issue about if I can get away without charging VAT to offshore companies who we know will not pay it as it is inappropriate for them. That was the only thing stopping me registering. I would appreciate further comments on any experiences anyone else has. I would register in a shot (despite the undoubted hassle) if I knew for absolute certain that I did not need to pay the revenue VAT on invoices I get paid from offshore betting companies. Remember, as an affiliate, in effect, I am invoicing the company that pays me (even if the mechanics don’t quite work that way in reality). So I would be invoicing Victor Chandler (for Victor Chandler read “any offshore company that does not register for VAT”) for the earnings I am due. As I am VAT registered in the UK, I still have the concern that I may have to add VAT to that invoice despite the fact we all know Victor Chandler will not pay it (as they are in control of payments to their affiliates and understandably won’t add VAT). I obviously loved Simmo’s answer. I just wish my accountant had said the same thing in as definitive and clear way. Because my accountant didn’t I am still a little uncertain. So if anyone (i.e: a UK affiliate registered for VAT) can confirm their personal experience and reiterate that Simmo is totally correct that I don’t need to add VAT to invoices to non-VAT registered offshore companies then I would grateful!
I can’t be definative mate sorry – I’m in the wrong country.
But I can tell you. ..
1) I don’t charge GST on any invoice for my Overseas Work
2) No UK company – eg. BETFRED, BET365, LADBROKES has ever paid me VAT on an invoice – because I’m outside the VAT regime.
3) Our politicians down here are not smart. I’m sure GST is based on and administered exactly like the UK VAT.
So … i’m 99% certain that you are not supposed to charge GST on invoices for overseas companies – it’s supposed to be a local tax on consumers.
So a UK company should be paying VAT to you if you are VAT registered – and you’ll pay it onto the government. But they don’t lose out – because they claim it all back.
In VC’s case – I’m sure that I’ve seen the question somehwere in their affiliate system – so I reckon their geared up to handle this simply.
But again -talk to your accountant – and if he/she really does not know …
Change accountants !!
:tongue:@Simmo! 146213 wrote:
Yup – if you spend a lot, there’s some sense in it, but the paperwork, fines and timescales are a PITA over here IMO.
A pain in the arse?
It’s cash back every year and pretty easy money really …
Mind you – I can do it online down here – so maybe its tougher in the UK?it’s about VAT zero-rating , more here
2.2 Why does zero-rating apply to exports?
VAT is a tax levied on goods and services consumed in the EC. When goods are exported they are “consumed” outside the EC and to impose VAT on such goods would be contrary to the purpose of the tax. Therefore, the supply of exported goods is zero-rated provided certain conditions are met.i use this sentence:
“Vat due under the reverse charge rule”
wich practicly means – no vat applied
I have contacted my accountant amd he said: “if the customer is VAT registered and provides you with the number, you have to include this number on YOUR invoice and then you do not have to charge VAT. All other instances you have to charge VAT. Non EC – you do not charge VAT”.
We will have a meeting on Monday, so would give more details by then.“if the customer is VAT registered and provides you with the number, you have to include this number on YOUR invoice and then you do not have to charge VAT”
I don’t understand this sentence at all. You must have heard him wrong. If two companies are VAT registered (i.e: you and the company you are dealing with) then you obviously do charge that company VAT when you invoice it. It pays the VAT to you and you pay it on to the revenue.
If you are making more than 64k in taxable supplies in a year then you have to be VAT registered in the UK.
That means if you are invoicing UK companies which are VAT registered you need to add an additional 17.5% to your invoice. This 17.5% is then paid to the nice VAT man.
Companies registered offshore you dont add VAT.
And dont forget to register if you are eligible..there are penalties for late registration..I know! :sarcasm:
In fact I had to invoice many casinos/UK bookmakers just for the VAT which I should have charged in the first place. Now THAT was a PITA!
@mobillica 148000 wrote:
…there are penalties for late registration..I know!
There are penalties for everything…late registration, late returns, incorrect returns, incorrect amounts – and a few too many of those you start getting audited…that’s where the real fun starts
Gotta say though its a very clever form of taxation, getting Joe public to collect and document it all for you.Just one note though if you are going down that route: a number of goods and services in the UK are VAT-exempt. It’s good to know the list and it can work to your advantage with a good accountant in tow. For example, if you write and sell some software, you don’t have to invoice VAT on the manual and training – or at least you could a few years ago…might need to check that in 2007 – but you get the gist
@justbookies 147993 wrote:
I don’t understand this sentence at all. You must have heard him wrong. If two companies are VAT registered (i.e: you and the company you are dealing with) then you obviously do charge that company VAT when you invoice it. It pays the VAT to you and you pay it on to the revenue.
I beleive it is to do with “reverse charge mechanism“
my accountant:
“- did you mean one company is UK company, another company is EC company?
– I am referring to 2 companies that are trading with each other that
are outside the UK but within the EC.– Then if both companies are VAT registered you can invoice without
VAT if you quote the other companies VAT number on your invoice.
Some companies will not pay VAT and ask you to re-invoice without
VAT as even if they can claim it back it causes a cashflow issue.
Remember this is for trade outside the UK and within the EC only.”
