Do I need to pay VAT to Go Daddy?

[marty1990]

I set up a website for my student union through Weebly, and I wasn't a fan of the URL being '.weebly.com', so I purchased a domain name through Go Daddy. I saw something regarding VAT but dismissed it as I figured it didn't apply to me. After looking online, I decided it would be best to ask, and I received this email:

Dear marty1990,

Thank you for contacting Online Support. If you are a resident of any country within the European Union (EU), you are required to pay Value Added Tax (VAT) in accordance with European Union Directive 77/388/EEC. This directive requires that companies located outside of the EU, who provide electronic goods and eServices to private consumers residing in the EU, remit VAT taxes to the EU member states in which the customers are residents. The VAT is calculated at the applicable rate of the country in which the customer is a resident. Only business-to-consumer sales are taxable.

Business-to-business sales may be exempt from the Value Added Tax if the business making the purchase has a current and valid VAT ID number.

Regards,

Online Support

Now, I told them I set up the website on behalf of my student union, and I'm not making any money off the website - which I told them - but they still sent me that email. We're not a business.

Now I'm totally confused. Do I need to pay VAT or what? If I don't pay, what could happen?

Help would be appreciated.

Thanks.

 

[snberk103]

Yes, you need to pay the VAT. You are not the business, they are the business. You are the consumer.

If you had been a business, then you would have a VAT number yourself, which allows you to claim back (or perhaps not pay) the VAT you pay GoDaddy. Of course, then you would have to collect VAT on any transactions, and remit that back to the HM Government.

 

[marty1990]

Thanks for the reply.

So, looking on the website, I need to enter a VAT code or something, to state I'm to pay UK VAT.

Where do I find this code? I'm a bit lost to be honest.

 

[snberk103]

Thanks for the reply.

So, looking on the website, I need to enter a VAT code or something, to state I'm to pay UK VAT.

Where do I find this code? I'm a bit lost to be honest.

I suspect it's just rolled into the price, and you don't have to do anything.... just pay the bill and move on.

 

[ssmed]

If you are a VAT registered business in the UK and pay a UK firm you will always pay the VAT. If you pay an EU firm then you may or may not, most commonly not, but only after giving them your valid VAT details which are checkable via various means.

Student Unions and Charities do pay VAT (although there are some complicated exceptions for the latter). The work involved in getting VAT registered and the reporting needed is very unlikely to be worth it in your position, but if you are handling large amounts of money then you should speak to an accountant for advice.

Think of it like this - do you pay VAT at the garage when you fill up the minibus for the SU - yes and for every other purchase, why should this be any different.

 

[marty1990]

That's the thing, we don't handle any money, and any money we do spend, it's our own money - as in the students themselves, donations if you will. But money-wise, our Union doesn't have any, so I'm really stuck on what to do. I'm fearful that if I don't pay anything - apart from the fee without the VAT being added on - that I'll get a bill of money that I owe them for using the domain without paying the VAT.

 

[snberk103]

That's the thing, we don't handle any money, and any money we do spend, it's our own money - as in the students themselves, donations if you will. But money-wise, our Union doesn't have any, so I'm really stuck on what to do. I'm fearful that if I don't pay anything - apart from the fee without the VAT being added on - that I'll get a bill of money that I owe them for using the domain without paying the VAT.

OK, I may be confused here... but - it appears that GoDaddy simply wants to charge you VAT on the bill they send you for registering the domain name. So, if they charge you $50 (except it would be Euros, of course) and the VAT rate is 25%, then you owe them $50 + $12. And then you're done paying VAT. This is simply the tax that you pay for buying anything in the EU. The only difference is that because GoDaddy is a store that is not "local" they are listing the tax they are collecting separately. In my understanding, the VAT is generally 'invisible' in the EU.... that is to say, the price you see advertised for anything includes the VAT. In GoDaddy's case they are simply advertizing with a Price + VAT.

Or am I missing something here?

I do not read the message from GoDaddy as saying that you need to register for the VAT and start collecting taxes and then remitting them. That notice would come from a taxing authority in any case. GoDaddy is simply saying that they are adding a tax to the price of the domain.

In may cases, people registering a domain do so as part of a for-profit business. In this case the notice you received would be useful to them because they may in fact be registered for the VAT, and may be able to claim the expense on their tax forms. In your case, you are simply paying the VAT as you would on a pair of socks.

 

[GDKen]

@marty1990

I'm with Go Daddy and came across your post.

I would appreciate the opportunity to review and assist with any additional VAT concerns you may have. Feel free to direct message me.

Thank you to @snberk103, @ssmed for helping!

 

[rigbyn]

@marty1990

I'm with Go Daddy and came across your post.

I would appreciate the opportunity to review and assist with any additional VAT concerns you may have. Feel free to direct message me.

Thank you to @snberk103, @ssmed for helping!

Hi I am a business and since November I have been VAT registered. I tried to enter my VAT number on the billing page and it says that it is not valid. I spoke to your help line and they gave the story that if you provide a valid vat number then you dont pay this tax. That doesnt make sense as that is not the way vat (value added tax) works. The clue is in the name each business charges vat to its customer and can net off the vat that the business has incurred. If Go daddy has been collecting vat off supplies to uk customers then go daddy must have a vat number. That number should be shown on your invoices. That enables UK vat registered companies to reclaim the vat. Perhaps I have mis understood something?

 

[paulh69]

Hi I am a business and since November I have been VAT registered. I tried to enter my VAT number on the billing page and it says that it is not valid. I spoke to your help line and they gave the story that if you provide a valid vat number then you dont pay this tax. That doesnt make sense as that is not the way vat (value added tax) works. The clue is in the name each business charges vat to its customer and can net off the vat that the business has incurred. If Go daddy has been collecting vat off supplies to uk customers then go daddy must have a vat number. That number should be shown on your invoices. That enables UK vat registered companies to reclaim the vat. Perhaps I have mis understood something?

EU VAT is slightly different, it is not possible to reclaim it later... It isn't charged to VAT registered customers in the first place.

 

[MyopicPaideia]

@paulh69 is absolutely correct. The general rule with B2B commerce between companies from different countries within the EU is the VAT reverse charge directive. This means that the seller does not include its local VAT on the invoice, but the buyer is required to declare VAT at its local rate on the transaction to its domestic tax authority on its next VAT tax return.

GoDaddy is required to receive the registered EU VAT number of all of its EU VAT registered customers, because they need to report the amount of sales made to each and every EU VAT customer they have, in order to ensure they are collecting and reporting the proper amount of VAT for their local government.

If you are a private person or any non-VAT registered entity within the EU, none of this matters to you, as you will pay whatever VAT is charged to you.

 

[gnasher729]

Thanks for the reply.

So, looking on the website, I need to enter a VAT code or something, to state I'm to pay UK VAT.

Where do I find this code? I'm a bit lost to be honest.

There's nothing you have to do if you are not a company yourself. You just pay the amount they charge, and VAT is included. If you go to the supermarket and buy a pound of bananas or a mug or a pack of cigarettes, VAT is included in the price. You just pay, and they sort out what was VAT and what isn't.

 

[lincolnboland]

Hello,

I am agree with you that Go Daddy not add VAT charges, and even if they added then they have to display these charges at the time of purchasing new domains.