We are an advertising company that primarily generate mortgage leads. We pay for most of our advertising through Google Adwords, who are based in Ireland and “Reverse Charge” VAT to us. Apparently with this we put the amount of VAT into both the input and output sections so that it zeros out the reverse charge. The issue is that we then charge our clients 20% VAT for our mortgage leads, and we then pay that 20% VAT to the HMRC... So we get double charged on VAT because we can't reclaim that VAT from our advertising cost because we've already reclaimed it from the reverse charge!
So... we are in dire need of sorting out the structure! Please can someone help/advise?
This is an issue that your local tax advisor has to help you with. Different countries different tax rules. I know there is a thread in the public forums where somone claim it is all the same in the EU, however, it is not. you want to spend a few hundred euro to a local tax professional to get this sorted out.
Ok, update!
Spoken to a VAT specialist, and luckily for us..... there's nothing they can do! We zero out the Reverse Charge so that's black and white, therefore the additional VAT can't be reclaimed apart from VAT incurred company costs (which there are maybe 5% of the total VAT liability)
So I'm speaking with TurnerLittle to see what the best plan of action is!
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