Gmail & VAT

[TheCyclingProgrammer]

You need to make sure your accountant is aware that these services have been purchased from an overseas supplier and if you've provided them with your VAT a number and they've not charged you VAT, then your accountant needs to deal with these purchases using the reverse charge.

[PTP]

Thanks WTFH and TheCyclingProgrammer

It sounds like something I shouldn't have to worry about so long as I tell my accountant that I've signed up to this monthly payment.

[TheCyclingProgrammer]

What it is referring to is the VAT reverse charge on services.

Under EU VAT rules, Google are obliged to charge UK VAT on their service provided to UK based consumers (prior to Jan 2015 this would have been Irish VAT but now it's based on the customer location).

If you are a business, and Google verify this by asking for your VAT number, then Google doesn't have to charge you VAT (from their POV it's outside the scope of their local VAT rules, just the same as when we bill clients for services outside the UK it's outside the scope of UK VAT). In this situation, it is the customer who accounts for VAT under the reverse charge rules.

Strictly speaking this is how it should work for any business customer, VAT registered or not, but many suppliers will only treat supplies in this way if you provide a valid EU VAT number, which is why Google are asking for it.

In effect, you treat the supply as if you both made it and received it. Off the top of my head, you calculate the VAT using the UK rate on the GBP value of the service and add it to box 1 and 4 (even if you're on the flat rate scheme) and the net amount in box 6 and 7. The net result is you don't pay any VAT on the supply.

TLDR; you need to report any purchases of services from suppliers outside the UK on your VAT return using the reverse charge procedure.

[WTFH]

So, if you choose to register as a business you get the advantage of not paying VAT on it. To qualify you need to give them your VAT number. It's then your responsibility to correctly declare the spend in the appropriate way. This may vary from one country to another.


You are entering into a contract with a supplier. Said supplier may invoice you. When I invoice my clients, I quote their VAT number on my invoices along with my own. To do that, I need their VAT number.

[PTP]

I want to setup a gmail account @myco.co.uk

It asks is my tax status Business or Non-business
Surely the answer is business and they say they may get someone to review your choice if you chose non-business

I don't understand why I need to go giving them my VAT number or what this self assessment is that it's talking about.
When for every other expense I just tell my accountant the actual amount that left my company's bank account. I don't go giving e.g. WH Smith my VAT number.

All accounts with European Union (EU) business addresses are subject to Value Added Tax (VAT).

Accounts with "Business" tax status and a valid VAT ID are entitled to tax benefits as per applicable tax laws for the country as mentioned in Business Address listed for the account.

If you choose Business and your business address is outside Ireland:

You would have to provide your VAT ID.
We won't add VAT charges to your account. Instead, you'll be responsible for self-assessing and paying VAT at your EU member state's local rate. This is in accordance with article EU VAT Directive 2006/112/EC.

However, please note that we would not be able to extend above mentioned benefits if in case you have not provided us with a VALID VAT ID

If you choose "Non-business," your business may be reviewed by a specialist. We reserve the right to change your tax status to "Business" if we find that you're using your account for business purposes.