Vat question

[opc]

Hi All,

Just looking for some advice. We have various affiliates working with us. Some are VAT registered and some are not.

I just need clarification if their commission should have VAT on it or not? I have asked 3 or 4 people now and have had mixed responses. :glare:

Any advice would be much appreciated

Regards

Colin

 

[Scottish Business Owner]

Hi Colin,

Now that is a very interesting question! and not that easy to actually give you a definitive answer. I've linked to a good thread below on one of the affiliate sites that may shed a bit of light on things.

Are commission payments from affiliate networks VAT chargeable? - Affiliate Marketing

It would be useful to know how you pay the commission does the affilliate invoice you or is it done in some other way?

Another important point is whether your business is actually VAT registered.

This would be a good one to get a definitive answer on so I will also go and speak to a few people on this

 

[Mike Lewis]

Colin,

Just to be sure we've understood this .....

Your affiliates sell things on your behalf, and invoice you for a commission. Is that right?

If so, there can be no doubt ... If their business is VAT-registered, and its the business that is invoicing you, they have to add the VAT. I can't see how anyone could have told you different. (Unless there are factors you haven't mentioned, like you are based outside the UK, or something like that.)

But, ultimtately, it's their responsibility to ensure they are working within the law, not yours. If they are doing it wrong, it won't be you who are to blame.

Mike

 

[opc]

Morning all,

, thanks for the useful link and Mike, thank you also for your comments.

I think you have both answered my question. It certainly seems that our affiliates who are VAT registered should be invoicing us plus VAT.

Thanks for clearing it up folks. :thumbup1:

Colin

 

[Gouldie0]

Hi Colin,

Now that is a very interesting question! and not that easy to actually give you a definitive answer. I've linked to a good thread below on one of the affiliate sites that may shed a bit of light on things.

Are commission payments from affiliate networks VAT chargeable? - Affiliate Marketing

It would be useful to know how you pay the commission does the affilliate invoice you or is it done in some other way?

Another important point is whether your business is actually VAT registered.

This would be a good one to get a definitive answer on so I will also go and speak to a few people on this

Hi All,

Just picked up this post, i'll agree a very good question. Also, a very good link which does give some clarification on the question.

Mike, agree completely with your comment. As soon as a business is VAT registered they need to apply VAT to all outgoing invoices, if not they could be in a sticky position should they get an inspection. :scared:

Colin, from my point of view i would need to understand what the 'affiliates' are doing for you i.e. is it advertising, are they selling your products etc. and how the commission charge is presented to you?

If we can form a detailed answer to this question it may assist other businesses / forum members in future.

Kind Regards

Neil

 

[opc]

Hi Neil,

Thanks for your post.

We have development franchises and affiliates who both sell our print products as a service. In return they receive a percentage commission on all net sales.

Most of them are VAT registered however some of them are not.

Hope that helps explain

Colin