Adwords and VAT

[CDG]

Hi All,

I am a UK VAT registered company and I use Google Adwords extensively.

Can anyone advise on whether I can claim back the VAT component of what I have spent on Google Adwords? I understand that I have a business relationship with Google Ireland, but my accountant seems to think I can't which just seems an absolute con.

Any thoughts/experience in this area?

Chris.

[James Smith]

Chris,

As with all non-UK entities you cant reclaim the VAT back directly on your UK return.

However again as with all non-UK entities what you need to do is let Google know you are VAT registered.

Once you provide them with your VAT number they will stop charging you Irish VAT.

And even better than that, they will also refund the VAT you have paid so far, subject to a time limit I think of 6 months from memory. There should be a FAQ on it on the google site.

I hope that helps you reclaim this.

Finally if you dont get all your VAT back there is a system for recovering intra EU VAT


Regards,

[CDG]

Thanks James,

I did this - they are not charging me VAT, its itemised as zero on my invoice. Just looked more closely at the invoice and this zero about is asterisked with the following:

* Services subject to the reverse charge - VAT to be accounted for by the recipient as per Article 196 of Council Directive 2006/112/EC

So that means I need to fill out the return and calculate the VAT at the UK rate, but then include it as both input and output VAT, net sum zero?

Chris.

[James Smith]

Chris,

mad though it sounds yes that is the theory, not that many people actually bother! it wont affect the total VAT due unless you have a business that is "Partially exempt" ie some if with VAT and some not.

Regards,

[m8internet]

If you are using google AdWords, why are the invoices from them £0.00 ?

I have completed this process for all (non-Ireland) VAT registered companies I deal with, and they seem surprised this is possible
The process is a little cumbersome, but this is probably due to google AdWords having to check each case manually
These companies are then appreciative, and do agree the amount repaid (exempt) is small, but they should not have been paying it in the first place as the application form clearly states :
Country
VAT Number
Entering these details should have applied exemption automatically, or at least flag the account for manual review

[CDG]

Originally Posted by m8internet

If you are using google AdWords, why are the invoices from them £0.00 ?

The invoice is not zero, just the VAT component as itemised on the invoice - there's still a bill.

Chris.

[m8internet]

Originally Posted by CDG

The invoice is not zero, just the VAT component as itemised on the invoice - there's still a bill

That confirms what I thought would be the case, the item is non-VAT and shows as £0.00
Therefore claiming back the VAT is no longer appropriate