Okay, I was wondering how much adwords add on to your bill as tax. I've got a us dollar adwords account and a British Pounds one, both registered to UK addresses. I'm being charged UK VAT on both - 17.5%. I paid about £400 VAT today alone on my adwords, its killing me to see so much money thrown away on tax If I moved country and set up new adwords accounts, could I run this without paying any tax, or less tax? Even if I could make just a 25% saving in tax, I could use that money to live completely free somewhere! Can anyone please let me know which country you are in and what % you get added onto your bill. If this is workable I'd leave UK in a second, I'm sick of living here anyway. Thanks!
I had no idea they were charging anyone a tax... must depend on the jurisdiction where you reside. I am also from the US and do not have any tax charged to my Adwords account.
My economics aren't great, but assuming that the VAT system is more or less the same throughout the EU,.. here's how it works in The Netherlands: 1. Companies have to charge VAT, payable to their Tax Agency/Gov 2. So, both end-consumers and companies automatically end up paying VAT. 3. Total VAT a business has to pay to their government = Charged VAT - Paid VAT 4. What if you actually paid more in VAT than you charged, ending up with a negative balance? ==> ..you get it back from your tax agency/gov. 5. Bottom line: VAT only really affects the end-consumers and doesn't have much influence on your company's bottom line. Maybe it works different in the UK (which I doubt). It might be worth looking into as it looks like it might literally save you a ton of money (£400x365=£146,000 ). More Information: VAT in the UK Edit: Quick quote:
Thanks for the info, green rep added for that. Yeah, its the same here. Yup same too, if you are in this position you can claim back more than you are paying. The problem is I'm running these campaigns on behalf of various clients. Its having a huge impact on my bottom line in this case, because I'm not able to claim any VAT back at all. Its effectively coming straight out of my profits. Bigwill/Shauner, VAT is similar to Sales Tax in USA i think, I thought you would have had that added onto your bills? I guess I need to either register for VAT and start claiming back as much as I can, or get out of UK! Theres no way I could even begin to claim back half of what I'm spending so I think I best start checking airline websites
Thanks for the Rep! I'm wondering how exactly you're managing the campaigns of clients though. Maybe I'm missing something here, but I can only imagine two possible scenarios: You're maintaining the campaigns within your own Adwords account You directly pay for all Adwords costs Money flows from you to Adwords. -- You should be able to get all VAT back You're maintaining the campaigns using the clients' own accounts The client pays for all Adwords costs You might advise them to register for VAT if they have a large ad budget and if they haven't done so already. It isn't directly your problem though. Either way, I can't really see how this would directly affect you...? Also a small note: no idea if it applies to the UK, but Google makes use of a 'transferred VAT' regulation here which applies to online services. They don't charge me the required 19% VAT and I'll have to manually add the 19% VAT to my administration. If I pay them €10,000, then I'll have to log €10,000 Adwords Costs + €1900 'Transferred VAT'. I've to report the €1900 VAT both as payable and reclaimable/deductable, to the government, so it's more of a weird formality. The advantage is that you won’t have to pay Adwords any VAT at all and won’t have to wait for the gov. to process your ‘reclaims’. Again, I’m not sure if it applies to the UK, but it might be another reason to apply for VAT .