VAT Rate Changes
The Standard rate of VAT changed from 17.5% to 15% with effect from Monday 1 December 2008. It will change back to 17.5% on 1 January 2010. The change was announced in the Pre Budget Report on 24 November 2008 giving businesses and software developers less than 7 days to update all their systems, prices and catalogues etc.
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Flat Rate VAT For Affiliate Marketing
Using the UK flat rate VAT scheme is quite often beneficial for affiliate marketeers. Many in the affiliate marketing sector have low overheads and in particular small amounts of input tax (VAT charged on purchases).
Under the flat rate scheme, input tax is not reclaimable and the VAT paid to HMCE is calculated as a percentage of gross sales. Gross sales are net sales + the VAT charged to the networks.
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Flat rate VAT scheme
Is the VAT flat rate scheme right for you?
Whether or not the VAT flat rate scheme is beneficial for you would depend upon the administration costs saving due to its simplicity weighed against the fact that in most circumstances, input VAT cannot be reclaimed.
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How to reclaim VAT on Google Adwords
Google Adwords is based in Ireland and under EU VAT law they charge 21% Irish VAT (UK is 15% from 1 December 2008).
However, if you use Adwords for business purposes you can reclaim the Irish VAT. Many accountants are unaware of this fact.
