VAT - Adsense Income is 0% Reverse Charge, but can a blog be a trade?

VAT - Adsense Income is 0% Reverse Charge, but...

Didn't find your answer?

This is a weird scenario I've come across.

Someone runs a blog dedicated to a particular topic area. Pretty much 50% of his time is spent on it as he does part time work elsewhere for other income. Content is updated frequently and his site is linked to Adsense and various other means of income from advertising.

He has now brought up a VAT consideration and a "trade" consideration.

Can he declare that the act of maintaining a blog for obtaining income from advertising is a trade and if so does that mean that if he registers for VAT he could claim back the VAT on expenses relating to maintaining the blog or providing content. It's a review site so he has to acquire products to review for his followers which costs him money.

Now VAT-wise I'd say, that's fine, because Adsense income (based on the place of supply rules etc) would classify as outside the scope of VAT, however I'm more concerned about the "trade" aspect. Granted it takes up a lot of time, requires a lot of work, involves costs and generates income, but is that enough to classify it as a legitamate trade? To be fair he gets a fair amount of income from the advertising, though I wouldn't be surprised if he made a loss for a fair while none the less.

Thoughts please?

Replies (4)

Please login or register to join the discussion.

avatar
By 3569787
03rd May 2016 17:12

Google Adsense comes from Ireland?

;

Thanks (0)
avatar
By luke.hector
03rd Jul 2013 09:35

I've heard two separate stories about it - one that it's in the US and one that it's in Ireland - I personally thought it was in Ireland as well.

Not that it matters too much, it's either outside the scope or reverse charge, either way you're not paying any VAT so the same effect happens.

I like the way you phrase the trade there. That does make some sense and is a good sign. The products that are purchased incur a lot of VAT and even as a sole trader it would be worth registering (limited company isn't a option as profits don't justify it and the loss relief wouldn't be very useful as s74 (or was it s72?) early trade loss relief would only be available to a sole trader.

 

I'm willing to go with that assessment - anyone wish to dispute the trade classification there or agree?

Thanks (0)
avatar
By 3569787
03rd May 2016 17:12

Ireland

;

Thanks (0)
avatar
By luke.hector
03rd Jul 2013 10:16

Thought as much - but either way, long as it isn't standard rated all is well! The client will be happy to know he can offset some of the obscene costs of the products he's testing.

Thanks (0)