We use Google Ads for marketing, and the invoice is 0% VAT but has a 2% Digital Services Tax (DST) Fee. Do I need to allow for the DST as VAT, if so what VAT code do I use, or does is it classed as an expense, in which case how do I set up the correct category for it?
Hi @SarHick18
DST is non-reclaimable so just enter in the same category/account as the Ads cost.
In fact, unless you want to separate out, there's no need to add it as a new line. Simply roll it into the Ads cost.
It's actually rather underhand of Goggle. The tax is meant to be a tax on their revenue; to prevent them from evading (sorry, that should be) avoiding, UK tax. Instead of paying that 2% they have simply increased their prices by 2% but calling it DST shifts the blame to UK Gov.
Hope this helps.
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