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Reverse Charge VAT
Hi,
I am on the VAT flat rate scheme. I advertise some of my websites via google adwords which needs to be treated under the reverse charge VAT rules. From what I can gather from my accountant I need to enter deemed VAT @ 15% of the total of my adwords spend in to box 2 of my VAT return, so if for example I spend £100 on google adwords then in my VAT return in box 2 the figure should be £15.
Is there any way in freeagent to enter this reverse charge VAT? If not then is there any way of changing values in the VAT section on freeagent so that it is in sync otherwise it will appear as though I'm paying more VAT than I should be so the figures shown in Freeagent will gradually get further away from what they should be.
I am on the VAT flat rate scheme. I advertise some of my websites via google adwords which needs to be treated under the reverse charge VAT rules. From what I can gather from my accountant I need to enter deemed VAT @ 15% of the total of my adwords spend in to box 2 of my VAT return, so if for example I spend £100 on google adwords then in my VAT return in box 2 the figure should be £15.
Is there any way in freeagent to enter this reverse charge VAT? If not then is there any way of changing values in the VAT section on freeagent so that it is in sync otherwise it will appear as though I'm paying more VAT than I should be so the figures shown in Freeagent will gradually get further away from what they should be.
I’m confused
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Inappropriate?I don't agree about Box 2 but I have a client walking through the door. Will get back to you later.
I’m confident
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Inappropriate?Thanks Stuart, I questioned my accountant on this again and he's said that adwords costs are completely ignored on the FRS, so it looks like I've been over paying my VAT. Is this the way you see it too?
I think I have just misunderstood the communication between myself and the accountant, which isn't helped by me trying to understand what HMRC says and it making me more confused.
I’m thankful
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Inappropriate?I'm not certain this is going to help!
HMRC states "You need to include any services from abroad that the reverse charge applies to, but don't include the value of the services in your flat rate turnover calculations. " http://www.hmrc.gov.uk/vat/managing/r... (You'll have to scroll down)
I think you therefore have to add the value of the services into your net outputs (Box 6).
I’m always amazed how illogical VAT is
