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  1. #1
    ABW Ambassador CrazyGuy's Avatar
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    Anyone gone through the process of being VAT registered on the basis (wholly or mainly) of affiliate commissions from US companies?

    I'm just about to reach the threshold but I can imagine this getting messy. If my wife and my accountant don't fully understand how this business works, what chance is there of steering a clean course through HM C&E?

    1) I think I'd classify what I do as a professional-type service that means the VAT should be assessed where my customers are located (ie - no VAT). Any precedents?

    2) I have virtually no UK/EC merchants or networks but plan to add some - do they routinely allow for VAT in their forms and payments?

    I suppose I should be happy about the income level, but I have a bad feeling about this VAT thing.


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  2. #2
    ABW Ambassador CrazyGuy's Avatar
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    Seems sad to answer my own query, but in case it helps someone down the line ...

    Looks like the best way to do this is to classify affiliate income as "internet advertising". This is a class of supply that is VAT-able but the place of supply is decided according to where your customer is - so UK/EC income needs to have the relevant VAT applied, but US etc income is classed as "outside the scope of VAT" and so it doesn't have to be charged.

    The good thing about this (?) compared to it being VAT-exempt is that it means you can claim all your VAT expenditure back.

    Important Note: I am not a tax advisor so get the right advice before doing anything


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  3. #3
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    I'm listening crazy guy
    I'm no where near the threshold though...

    It's easy to chase rainbows but it 'ain't so easy to catch 'em...

  4. #4
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    Hi CrazyGuy
    I'm VAT registered 'cos I also do UK-based consultancy work.
    VAT does not apply on sales (sales of your services as a website developer) outside the UK/EU.
    Result = HM Customs & Excise make a payment *to me* every quarter... nice.
    Of course, this is based on my accountants advice... maybe you should look for an accountant that deals with computer service companies.

  5. #5
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    Sice CJ is a UK company would it pay VAT to its UK affiliates provided those UK affiliates are VAT registered?

    marcelle

  6. #6
    ABW Ambassador CrazyGuy's Avatar
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    <BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by marcelle:
    Sice CJ is a UK company would it pay VAT to its UK affiliates provided those UK affiliates are VAT registered?

    marcelle <HR></BLOCKQUOTE>

    I spoke to their UK office specifically about this.

    In fact CJ is a US company with a UK office - so they don't charge or add VAT, and the "place of supply" of the "internet advertising" for VAT purposes is the US.

    And since this has been revived - a small clarification on midnightcoder's post regarding "VAT does not apply on sales (sales of your services as a website developer) outside the UK/EU." This depends entirely on what goods/service you provide - specifically, on the "place of supply". It varies - some services are judged to be provided where you are, others (like advertising) where your customer is. So there certainly are some services that would be VAT-able even if the customer is outside EC.

    And finally - thanks for reviving this thread as it reminded me my VAT return is due this week

    All previous caveats apply ...

  7. #7
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    Vat threshold
    Last time i looked VAT threshold was about 50K on turnover , how does this work , i assume i'm below this thershold as my income is nothing spectacular but don't want any suprises later on .

    I'm assuming the 50K figure for affiliates making money from affiliates networks is the combined income from all revenue streams can you subtract expenses from this ?

    Thanks for any advice .

    www.cashbacktoyou.co.uk

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