The Standard rate of VAT changed to 20% from 17.5% with effect from 4 January 2011.
Changes to the flat rate scheme percentages
Alongside the changes to the Standard rate, the flat rate percentages for many trade sectors changed.
As for previous VAT rate changes, you will have to work out your gross sales for pre and post 4 January and apply the appropriate flat rate percentage to each.
As of 1 January 2010, the requirement to report to HMRC the value of sales to other EU member states was extended to include services whereas it previously only applied to the sale of goods.
The ECSL rules applies to all VAT-registered businesses in the UK who supply goods and/or services to a VAT-registered customer in another EU country.
The ECSL is a statistical return, usually submitted quarterly, used by the UK government to prepare intra-EU sales figures.
It is also used by the tax authorities in other EU countries to check that the businesses on your ECSL are dealing with the VAT correctly.
Click here to read the rest of this guide (EC Sales List (ECSL) for services supplied to other EU member states)
I regularly receive enquiries from affiliates who are confused as to how VAT affects their business. In particular they need to know what has to be taken into account when looking at whether or not they need to be VAT registered.
The VAT rules as they apply to UK affiliate marketeers are quite complicated and not only do you have to split your commission income into several types, you also need to keep track of costs of services supplied to you from businesses located outside the UK.
As of 1 January 2010 (for VAT purposes only), the vast majority of services are deemed to be received where the customer belongs and the customer has to account for the VAT.
Click here to read the rest of this guide (VAT for affiliate marketeers)
Do you need to register for VAT?
To find out whether you need to be VAT registered you need to calculate your VATable supplies each month and compare the total for the last 12 months with the VAT registration threshold.
For this calculation, non UK advertising expenditure such as Google Adwords, Facebook and Microsoft Adcenter should be added onto your turnover in working out your VATable supplies.
This is because, for VAT purposes, advertising from non UK suppliers comes under the Reverse Charge rules, and VAT is accounted for by the recipient of the services (i.e. the customer) in their VAT return.