Self-billing and VAT on affiliate commission
If you run an affiliate programme from the UK, somebody has to raise an invoice for every commission you pay. Most affiliates never raise one, and chasing them is not a system. Self-billing is the arrangement that lets you raise it on their behalf.
What self-billing is
You issue the invoice for your affiliate's supply to you, in their name, and you both keep a copy. HMRC sets out the conditions in VAT Notice 700/62. No prior approval is needed, but the arrangement has to be agreed in writing before the first invoice, and the agreement has to be kept.
It only carries VAT between VAT-registered parties
A self-billed VAT invoice is an arrangement between two VAT-registered businesses. An affiliate who is not registered is not charging you VAT, so there is no VAT to put on the document, and what they need is a commission statement rather than a VAT invoice. Affiliatant tracks the status and produces the right one.
What has to be on the document
The ordinary VAT invoice fields, with the affiliate as the supplier and you as the customer; a mark identifying it as a self-billed invoice; both VAT numbers; a sequential number; the issue date and the tax point. A correction goes on a separate credit note rather than by editing an invoice already issued.
An affiliate outside the UK
The place of supply decides the treatment, so an affiliate elsewhere is not simply the UK rule with a different address. Affiliatant applies the treatment that matches the affiliate's country and registration status, and records which it used, so the reason is on file rather than in somebody's memory.
The agreement has to be reviewed
A self-billing agreement is reviewed periodically, and a supplier who deregisters or whose registration changes has to be caught. Affiliatant validates the VAT number, stores the signed agreement and prompts for the review rather than leaving it to a calendar reminder nobody set.
What happens when commission is clawed back
A refund after payment does not change an invoice that has been issued. It becomes a debt netted off the affiliate's next pay run, with a credit note to match, so the paperwork and the money agree without anything being rewritten.
This is not tax advice
It describes what Affiliatant produces and what VAT Notice 700/62 requires. Your own circumstances are yours and your accountant's. Check the current notice on GOV.UK before you rely on any of it.
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