Online advertising VAT

petepirate2

I have been struggling for a long time with this and I really want a definite answer. I have asked in places, including Google and Facebook, to which they have not provided an adequate response.

I have a gaming website, which is not a business it is a hobby that makes NO money. Again, I am not looking to make any money out of it. There are no adsor anything like that, need I say again, I am not making any money out of this,
it is a side project for FUN.

I have been very upset because I have been wanting to buy ads for the site to get people to visit it, sounds simple right? But ads and get people to visit the site...well not really. I have been told that I need to pay VAT on it, but the company will not add VAT to the payments and I have to work it all out myself.

Why cant I just buy ads, run them and not worry about VAT, SO FRUSTRATING!!

Chickabiddybex

Buying ads where exactly?

petepirate2

Chickabiddybex wrote: »

Buying ads where exactly?

Google adwords - They explicitly said I need to consult with my 'tax office' whatever that is

Facebook ads

Both refuse to chareg me VAT and tell em to work it out myself as I am a business. I am not!!

wongataa

Well it is generally businesses that buy ads so I'm not surprised they won't help you. You could of course set up a business that runs the website. Businesses don't have to make money. Either way I would speak to an accountant.

petepirate2

wongataa wrote: »

Well it is generally businesses that buy ads so I'm not surprised they won't help you. You could of course set up a business that runs the website. Businesses don't have to make money. Either way I would speak to an accountant.

So, basically I cannot setup a website for fun?

DoaM

petepirate2 wrote: »

So, basically I cannot setup a website for fun?

Who said that? Of course you can.

What you can't do is buy advertising as though you were a consumer (i.e. VAT inclusive) as the advertising platforms you wish to use are only prepared to deal in a business capacity (i.e. VAT exclusive).

Calculating VAT isn't exactly hard ... amount x 1.2 gives the total. (Or amount / 5 then add to the amount). Examples:

Cost £5 ... VAT £1 ... Total £6
Cost £3.75 ... VAT £0.75 ... Total £4.50

petepirate2

DoaM wrote: »

Who said that? Of course you can.

What you can't do is buy advertising as though you were a consumer (i.e. VAT inclusive) as the advertising platforms you wish to use are only prepared to deal in a business capacity (i.e. VAT exclusive).

Calculating VAT isn't exactly hard ... amount x 1.2 gives the total. (Or amount / 5 then add to the amount). Examples:

Cost £5 ... VAT £1 ... Total £6
Cost £3.75 ... VAT £0.75 ... Total £4.50

And who do I pay it to? Governement? need to fill in assesment form..really? All that hassle just becaus eI wnat to advertise my website?

Is this really the only way I can advertise my website? What companies do deal with individuals and put tax on for you?

How come when I buy something on Amazon I dont have to do the same? Why cant they just do what Amazon do and shove the tax on the payment?

bingo_bango

What? No.

The invoice you receive from Google (or whomever you choose) will have a price for the cost of the service. Then they will add VAT @ 20% and that will be displayed as the total to pay.

There is no interaction with HMRC nor forms to be completed.

The price they quote you up front is without VAT, so you need to factor in an additional 20% when considering how much you want to spend.

petepirate2

bingo_bango wrote: »

What? No.

The invoice you receive from Google (or whomever you choose) will have a price for the cost of the service. Then they will add VAT @ 20% and that will be displayed as the total to pay.

There is no interaction with HMRC nor forms to be completed.

The price they quote you up front is without VAT, so you need to factor in an additional 20% when considering how much you want to spend.

Are you 100% certain on this? I have been told you have to be a business and I have to work out my tax on my own or with an accountant. This was on live chat with Google

Quote:

Google Adwords pay per click advertising is now one of the most common advertising methods used by businesses yet a lot of people do not understand how to correctly account for the VAT on Google Adwords. It is important you complete VAT returns correctly as HMRC can impose penalties.

bingo_bango

No,

You will be acting as a buyer and paying VAT on the total cost of the advertising service. The VAT element is a mandatory charge which the service provider is liable to pay to HMRC. All goods or services you buy (apart from a small number of exempt items) have VAT included in the price. The business pays this to HMRC. In a normal shop like Tesco, the law also states that the price shown to the consumer must be inclusive of VAT. that is why you don't get shown a VAT free price and then have to add 20%.

If you wanted to subsequently reclaim that VAT paid then you must register with HMRC to do so. That needs an accountant in some cases and complicates the situation for some small businesses, but as you are not a business, you won't be reclaiming it.

You're overthinking this.

petepirate2

bingo_bango wrote: »

No,

You will be acting as a buyer and paying VAT on the total cost of the advertising service. The VAT element is a mandatory charge which the service provider is liable to pay to HMRC. All goods or services you buy (apart from a small number of exempt items) have VAT included in the price. The business pays this to HMRC. In a normal shop like Tesco, the law also states that the price shown to the consumer must be inclusive of VAT. that is why you don't get shown a VAT free price and then have to add 20%.

If you wanted to subsequently reclaim that VAT paid then you must register with HMRC to do so. That needs an accountant in some cases and complicates the situation for some small businesses, but as you are not a business, you won't be reclaiming it.

You're overthinking this.

So I can just buy advertisements and not need to worry as I am an individual? I do not need to do any self assessment forms?

What about this:

AdWords can only be used for business purposes in the European Union.

Google can't give advice on VAT. So if you have a question about VAT registration, then please contact your tax advisor or revenue commissioner.