VAT on US income

Nearing VAT threshold

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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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By paul.benny
11th Mar 2020 08:58

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.

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Replying to paul.benny:
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By Rammstein1
11th Mar 2020 11:54

Cheers for that Paul. So no UK VAT and no Us taxes!

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By paul.benny
11th Mar 2020 16:47

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.

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chips_at_mattersey
By Les Howard
11th Mar 2020 20:38

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.

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By Matrix
11th Mar 2020 21:33

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.

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By Rammstein1
12th Mar 2020 08:58

Thanks everyone, that's pointed me in the right direction.

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