I had noticed that the new Google Adwords invoices do not state the “Services subject to the Reverse Charge”. On looking to see whether I still process the invoice in the same way by looking at previous posts, I have realised that I have not been adjusting out the Box 2 figure on every VAT Return I have made as mentioned by Joe in the post VAT reverse charge.
What should I now do to correct this? Do I now adjust for all previous returns (since 01/03/12) on my next VAT Return by totalling what should have been adjusted over that period of time, or should I just contact HMRC?
I’m not aware of any changes to the way Google account for VAT, what is the VAT amount or rate levied on the invoice?
What goes in box 2 for EC acquisitions would normally go in box 4 as well, thus cancelling itself out. For EC services you would normally adjust these out of boxes 2 and 4, however this wouldn’t fundamentally alter the VAT calculations.
Google is using a different format for its invoices in January 2015 to the previous invoices (last one being December). The old style having a column VAT (0%):* with * reference below the table as “Services subject to the reverse charge - VAT to be accounted for by the recipient as per Article 196 of Council Directive 2006/112/EC”. The invoice would show record of payments received at the top then record of costs and VAT below.
The new invoice comes in 2 forms. One monthly invoice which just shows record of payments received and refers you to the VAT invoice for details on costs and VAT, which is in the second invoice but no mention of the services subject to the reverse charge but still shows the VAT rate at 0%.
I am guessing that the fact the VAT rate is 0% that it is still subject to the reverse charge even though it doesn’t say so?
When I tried to follow what should be done regarding services rather than goods, I was under the impression from Joe that it was simply Box 2 that you adjusted. Am I correct in thinking I read it wrong and that the adjusting of Box 2 is for goods instead?
I don’t believe Google have changed the way VAT should be accounted for, despite a change to their invoice format. If in doubt I would always recommend contacting Google directly about this, but as you say I believe it is still subject to the reverse charge.
Normally it would be box 2 and 4.
Box 2 accounts for the VAT element and box 4 the reverse charge. When you adjust them together they will not affect the final VAT calculation, which is what you want.