Is this fee from Google taxable?

It sounds as though your supply of services has been made to Google Ireland. This means that you have made a supply that is covered by the general business-to-business rule, i.e. the place of your supply depends on where your customer is based, rather than where your business is based or where you have carried out your work. In other words, Irish rather than UK VAT, is relevant here. Google Ireland will account for Irish VAT by doing a reverse charge entry on their next VAT return, based on the rate of VAT that applies in Ireland. 

 

The other good news is that you can still claim input tax on any UK expenses that you have incurred in relation to this work, even though you have not accounted for output tax on your fee from Google. This is because your fee would have been taxable if you had invoiced a UK business. In VAT speak, this outcome is known as “outside the scope with recovery”. 

 

Overall, this is the perfect VAT result - no output tax to account for on your sales but with input tax recovery on your expenses, subject to the normal rules. 

This article was produced in June 2022 – please always check with Fuller Spurling that information is current, up to date and applicable to your situation.