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  • FIRST POST
    • petepirate2
    • By petepirate2 13th Feb 18, 11:37 AM
    • 6Posts
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    petepirate2
    Online advertising VAT
    • #1
    • 13th Feb 18, 11:37 AM
    Online advertising VAT 13th Feb 18 at 11:37 AM
    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!!
Page 1
    • Chickabiddybex
    • By Chickabiddybex 13th Feb 18, 11:41 AM
    • 1,297 Posts
    • 1,606 Thanks
    Chickabiddybex
    • #2
    • 13th Feb 18, 11:41 AM
    • #2
    • 13th Feb 18, 11:41 AM
    Buying ads where exactly?
    Hi. I'm a Board Guide on the Gaming, Consumer Rights, Ebay and Praise/Vent boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with abuse). Any views are mine and not the official line of MoneySavingExpert.com
    • petepirate2
    • By petepirate2 13th Feb 18, 11:42 AM
    • 6 Posts
    • 0 Thanks
    petepirate2
    • #3
    • 13th Feb 18, 11:42 AM
    • #3
    • 13th Feb 18, 11:42 AM
    Buying ads where exactly?
    Originally posted by Chickabiddybex
    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
    • By wongataa 13th Feb 18, 12:35 PM
    • 1,337 Posts
    • 785 Thanks
    wongataa
    • #4
    • 13th Feb 18, 12:35 PM
    • #4
    • 13th Feb 18, 12:35 PM
    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
    • By petepirate2 13th Feb 18, 12:40 PM
    • 6 Posts
    • 0 Thanks
    petepirate2
    • #5
    • 13th Feb 18, 12:40 PM
    • #5
    • 13th Feb 18, 12:40 PM
    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.
    Originally posted by wongataa
    So, basically I cannot setup a website for fun?
    • DoaM
    • By DoaM 13th Feb 18, 12:49 PM
    • 4,379 Posts
    • 4,406 Thanks
    DoaM
    • #6
    • 13th Feb 18, 12:49 PM
    • #6
    • 13th Feb 18, 12:49 PM
    So, basically I cannot setup a website for fun?
    Originally posted by petepirate2
    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
    Diary of a madman
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    • petepirate2
    • By petepirate2 13th Feb 18, 12:53 PM
    • 6 Posts
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    petepirate2
    • #7
    • 13th Feb 18, 12:53 PM
    • #7
    • 13th Feb 18, 12:53 PM
    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
    Originally posted by DoaM
    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
    • By bingo bango 13th Feb 18, 1:13 PM
    • 2,486 Posts
    • 1,475 Thanks
    bingo bango
    • #8
    • 13th Feb 18, 1:13 PM
    • #8
    • 13th Feb 18, 1:13 PM
    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
    • By petepirate2 13th Feb 18, 1:21 PM
    • 6 Posts
    • 0 Thanks
    petepirate2
    • #9
    • 13th Feb 18, 1:21 PM
    • #9
    • 13th Feb 18, 1:21 PM
    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.
    Originally posted by bingo bango
    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
    • By bingo bango 13th Feb 18, 1:42 PM
    • 2,486 Posts
    • 1,475 Thanks
    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
    • By petepirate2 13th Feb 18, 2:08 PM
    • 6 Posts
    • 0 Thanks
    petepirate2
    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.
    Originally posted by bingo bango
    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.
    • AndyPix
    • By AndyPix 13th Feb 18, 2:13 PM
    • 3,641 Posts
    • 2,850 Thanks
    AndyPix
    Just buy the ads and stop worrying about it all.


    As stated above - you are over thinking this
    Running with scissors since 1978
    • forgotmyname
    • By forgotmyname 13th Feb 18, 3:56 PM
    • 27,190 Posts
    • 10,954 Thanks
    forgotmyname
    You do know you pay VAT on your weekly shopping don't you?

    Maybe write an app instead?
    Punctuation, Spelling and Grammar will be used sparingly. Due to rising costs of inflation.

    My contribution to MSE. Other contributions will only be used if they cost me nothing.

    Due to me being a tight git.
    • onomatopoeia99
    • By onomatopoeia99 13th Feb 18, 6:14 PM
    • 4,273 Posts
    • 9,626 Thanks
    onomatopoeia99
    You do know you pay VAT on your weekly shopping don't you?
    Originally posted by forgotmyname
    Food is zero rated for VAT. I understand what you're trying to say, but bad example
    INTP, nerd, libertarian and scifi geek.
    Home is where my books are.
    • stragglebod
    • By stragglebod 13th Feb 18, 6:40 PM
    • 130 Posts
    • 125 Thanks
    stragglebod
    Food is zero rated for VAT. I understand what you're trying to say, but bad example
    Originally posted by onomatopoeia99
    My weekly shop consists entirely of ice cream.
    • wongataa
    • By wongataa 14th Feb 18, 8:18 AM
    • 1,337 Posts
    • 785 Thanks
    wongataa
    Food is zero rated for VAT. I understand what you're trying to say, but bad example
    Originally posted by onomatopoeia99
    Not all food!
    • googler
    • By googler 14th Feb 18, 10:22 AM
    • 14,784 Posts
    • 9,706 Thanks
    googler
    You pay VAT on lots of things you buy. You don't need to account for it as a consumer.

    You only need to account for it if, as a business, you want to offset the VAT you took in against the VAT you paid out

    Example

    You buy 1000 of materials (excl VAT) and pay 200 VAT to someone else on these purchases
    You make stuff with materials and sell it
    You take in 2000 in sales of stuff (excl VAT), and charge 400 VAT on them

    The difference in the VAT figures (400 less 200 = 200) is what you now owe HMRC, but this ONLY applies if you and the suppliers are both VAT registered. Consumers, who are not VAT registered, who simply buy things from VAT-registered businesses, don't do this.
    • googler
    • By googler 14th Feb 18, 10:28 AM
    • 14,784 Posts
    • 9,706 Thanks
    googler
    However, from one of your quotes above;

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

    There you have it. Stop worrying about VAT on the price, because if you're not actually using Adwords to promote a business, you'll be in violation of the Terms of Business that you agree to when you sign up. VAT will be irrelevant by that point.
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