Google Adwords - VAT. Services subject to reverse charge.

Google adwords invoices from Ireland are subject to reverse charge of VAT.

I am aware of how to enter these invoices manually on the VAT return, but is there a recognised procedure to automate this in Solar accounts, so that I don't have to add these invoices manualy to each return?

Thanks for any help.
MIke

Hi Mike,

Yes that's not a problem. When entering a purchase invoice use a VAT rate of 0% and set the VAT Treatment to 'Purchase of Services from EU Supplier'. Solar Accounts will then automatically apply the reverse charge when producing a VAT return.

Cheers,

Thanks for your help regarding Reverse Charge VAT on Google Ireland invoices. These specificaly use the term Reverse Charge. On invoices from say Ebay, Luxembourg where VAT is show as 15% included. but I cannot claim it back on the VAT return, what then is the VAT treatment? Thanks

Hi Mike,

That's also easy - just set the VAT Treatment to 'Purchase of Services from EU Supplier' and set the VAT rate to 15%. In this case Solar Accounts recognises that the reverse charge doesn't apply because you are paying VAT to your supplier. Note: To manually set the reverse charge option, click on the small 'Up' arrow next to the VAT Treatment box.

Cheers,

Hi Mike -

Sorry I didn't notice that you said you cannot reclaim the VAT. Can you tell me why you cannot reclaim the VAT?

Cheers,

Hi Mark

The VAT office told me I could not claim it back from them as it was not UK VAT. (Luxembourg VAT at 15%). It was the same guy that told me how to do the reverse charge VAT manually - self charging it - so I hope he knows what I can and canot reclaim!

Just to confirm the reverse charging of VAT, doing what you told me previously puts VAT amount at 15% in boxes 1 and 4 of VAT return and adds the net invoice amount in boxes 6 and 7 too. Is that correct? That's what I would need to do for manual entry.

Thanks for all your help.

Mike

Hi Mike,

Ahh yes I see the problem now - in that case set the VAT Treatment to 'Out of Scope' and enter the VAT-inclusive amount on the purchase invoice. Note that you can register with eBay as a business so they don't charge you Luxembourg VAT (you would then apply the reverse charge as for Google Adwords). More details here:
http://pages.ebay.co.uk/vat-landing/general/

And yes, when Solar Accounts applies the reverse charge it affects boxes 1, 4, 6 and 7. You should be able to see this in the VAT Return Detail report which shows a break-down of each box on your VAT return.

Cheers,