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Reverse Charge & VAT on Google and Facebook ads

Reverse Charge & VAT on Google and Facebook ads

Reverse Charge for Google and Facebook adverts is a relatively new initiative from HMRC, which has been in place since April 2017. The aim is to ensure that digital companies with a UK presence, such as Google and Facebook, pay the correct amount of VAT on their advertising. The government estimates that this initiative will raise an extra £400 million in tax revenue every year.

How do these ads work?

Google and Facebook allow you to target your ads based on the customer’s location, demographics, interests, and more. For example, if you’re a plumber, you can target your ads to people who live in the local area, or to people who have recently searched for plumbing-related search terms. You can use Google’s AdWords Editor to create highly-targeted ads that show only to certain groups of people. For example, you could create an ad that shows only to people who live in the local area, or people who have recently searched for plumbing-related search terms.

If you set up your Google and Facebook ads correctly, you can see how well they’re performing by looking at the number of clicks they generate, how many people they reach, and how much money they make. This allows you to tweak them as necessary until they’re performing well.

What are the changes?

In the UK, Google and Facebook are required to collect and pay VAT on sales to UK customers. In the past, the way this worked was that a UK-based advertiser would set up a Google or Facebook account, and would have to pay the VAT upfront. Then, when they made a sale to a UK customer, they would have to charge their customer the VAT amount.

Previously, Google and Facebook charged advertisers based on the price of the advert. This meant that VAT was included in the price. However, under the new rules, Google and Facebook will no longer charge based on the price of the advert. Instead, they will charge based on the number of adverts that are shown to users.

The difference now is that there will be no VAT included in the price. Therefore, the advertiser will need to pay the VAT on their own. Now, Google and Facebook have a new system in place where they can collect and pay the VAT for you. This means that you can set up your online ads as normal, and you don’t have to worry about charging your customer the VAT amount. With this new system in place, you can now buy Google and Facebook ads from overseas, and still, charge your customer the correct VAT amount.

This is great news for small businesses who want to advertise online, but don’t want to spend time setting up a Google or Facebook account.

Who does this affect?

The new rules apply to all businesses that advertise on Google and Facebook, including:

  • Newspapers and magazines
  • Letting agents and estate agents
  • Online marketplaces and comparison sites
  • Travel companies and holiday providers
  • Service providers such as plumbers and electricians

How can I get more information?

If you would like to find out more about the new rules, we recommend visiting this page on the HMRC website: https://www.gov.uk/government/publications/vat-reverse-charge-for-digital-advertising

Affordable Pay-monthly Packages

We offer a full range of services to limited companies, solo trader, partnership, charity, LLP, CIC as well as individuals. We have arranged our services into easy to choose packages that suit your needs.

Start-up
£ 60  / Month (+VAT)

This price plan is suitable for the start-up companies who are not VAT registered.

  • Year-end accounts preparation and submission
  • Corporation Tax returns
  • Payroll & RTI submission for 1 employee
  • Personal tax return [salary & dividends income only] (Free)*
  • File confirmation statement (annual return) with Companies House
  • Reference letters for Director only (Free)*
  • Assisting with correspondence from HMRC and Companies House
  • Unlimited face to face advice and email support
  • 1 Director
  • 1 Shareholder
  • Annual turnover should be less than 80K
Limited Company
£ 100  / Month (+VAT)

This price plan is suitable for the companies who are VAT registered and turnover is less than 100K with a couple of employees.

  • Year-end accounts preparation and submission
  • Corporation Tax returns
  • Monthly payroll including RTI submission for up to 2 employees
  • Personal tax return [salary & dividends income only] (Free)*
  • File confirmation statement (annual return) with Companies House
  • Reference letters for Director only (Free)*
  • MTD VAT returns submissions – quarterly
  • Unlimited face to face advice and email support
  • 1 Director
  • 1 Shareholder
  • Annual turnover should be less than 100K
Company Pro
£ 150  / Month (+VAT)

This price plan is suitable for the companies who are VAT registered; turnovers are more than 100K and have 2 directors and shareholders.

  • Company formation (if required)
  • Year-end accounts preparation and submission
  • Corporation Tax returns
  • Monthly payroll including RTI submission for up to 5 employees (Free)
  • MTD VAT returns submissions – quarterly
  • Personal tax return [salary & dividends income only] (Free)*
  • File confirmation statement (annual return) with Companies House
  • Reference letters for Director only (Free)*
  • Unlimited face to face advice and email support
  • 2 Directors
  • 2 Shareholders
  • Annual turnover should be less than 200K
Company Premium
Let's talk.  / 

This bespoke price plan is suitable for the companies who are VAT registered, with more directors, shareholders and employees. Also, annual turnover is more than 200k and requires further bespoke services.

  • Company formation
  • Year-end accounts preparation and submission
  • Corporation Tax returns
  • Monthly payroll including RTI submission all employees
  • MTD VAT returns submissions – quarterly
  • Personal tax return [salary & dividends income only] (Free)*
  • File confirmation statement (annual return) with Companies House
  • Reference letters for the all Directors (Free)*
  • Unlimited face to face advice and email support
  • Flexible and can be discussed
  • Annual turnover should be more than 200K

Add on Services

  1. Personal Tax Returns

    This price plan is suitable for self-employed individuals, landlords and those who need to submit Self-Assessment Tax Returns.

    If you need to submit the Self-Assessment Tax Return, we can offer you competitive prices starting from £150 + VAT. Price can vary according to your nature of income. Please contact us for more details.

  2. Tax Investigation
  3. Business Legal Support
  4. Company Formation
  5. Business Mentoring
  6. ARA accounting services for ATOL & ABTA travel companies

    Our commitment to you is that we’ll ensure all the information we’ve submitted to the Civil Aviation Authority is up-to-date and accurate. 

Taxcare Accountancy was formed to provide Small & Medium Businesses with an affordable, proactive and professional accountancy services…