In January, Skype will charge charging Local VAT on subscriptions, yet when you top up, no vat is paid. I am just wondering how we need to deal with VAT when it comes to Skype?
At the moment they are reverse charging the VAT. As of January 2015 they will be required to levy VAT at the customer’s local rate (in the case of a UK business that would be 20%).
So come January 2015 enter Skype purchases as a standard 20% VAT purchase in your accounts. With that said, always check your VAT invoice and only reclaim what is permitted on the actual invoice irrespective of the date.