Is there VAT on Facebook Advertising? – Everything you Need to Know

Is there VAT on Facebook Advertising?

Value Added Tax, or VAT abbreviation, is a flat tax that applies on an item more or less similar to a sales tax. Here in this article, you will find in detail about VAT on Facebook Ads. Is There VAT On Facebook ads? – Read this whole post to know about it. 

Is there VAT on Facebook Advertising?

According to the EU, Facebook Ads have Value Added Tax on them, and they follow the reverse charge directive. If you are from another country than Ireland, then you will be charged according to the reverse charge VAT rules and regulations.

Before the changes brought in by the HMRC, Facebook and Google used to charge the users based on the advertisement price, and the total cost included VAT. But after the changes, both these social platforms charge the users based on the number of ads shown to their potential viewers. 

About Reverse Charge Services & VAT Registration

If you are running ads on Facebook, it is your responsibility to record the input and output VAT when receiving your reverse charge VAT invoice. Whenever your Facebook and Google ad expenditure increases, you need to add your VAT turnover to avoid breaching the VAT threshold. 

Note: The current VAT registration threshold is currently £85,000 as of 2021, and you will have to register yourself within 30 days of breaching the threshold.

Is there VAT on Facebook Advertising

1) Is there VAT on Facebook ads in the UK?

Facebook is set up in Ireland, a part of the EU, which means businesses that run ads on Facebook in the UK will be charged the reverse VAT charges. 

2) How to get a VAT invoice from Facebook?

You can generate your VAT invoice from your ad manager’s Go to the Billing section. Select the dates, find the transaction and download the receipt. 

3) How can you add VAT to Facebook ads?

You will need to add your VAT number and other asked business details to your Facebook ad account; after selecting your country, enter your VAT number and save the changes. 

Are you keen to know more details about VAT on Facebook and Google Ads, then connect with us? Visit our website Pearson McKinsey to learn more about us and our services related to accounting and finance.