We have a new client who receives income from US website for Youtube videos. She also receives commission from any leads who sign up to the website. Although she is approaching the UK VAT threshold, I'm thinking the income is exempt from UK VAT but she needs to consider the equivalent local / state taxes in US. Does anyone agree?
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YouTube/Google Adsense have some general tax guidance here
https://support.google.com/adsense/answer/2490070 (and linked pages)
From a very quick skim read, if your client has no presence in the US, she's not in scope for US taxes.
I'd study the guidance for yourself and be sure that it fits your client's business. In particular, be clear about the identity and location of the counter-parties - for example, when I list on ebay.co.uk, I'm not necessarily contracting with a UK entity.
The Place of Supply rules require consideration of the identity & status & location of customers, as well as the nature of the supply. Start in Notice 741A.
The income will not be exempt from VAT, but outside the scope of VAT. This still allows registration and recovery of input tax, so worth considering registration in any case.
No I disagree, see Les’s post for the UK tax analysis. The supply is not exempt, why did you think it was?
I would take advice on the US sales tax position. Which varies by state. Don’t make any assumptions.