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Do you supply digital services- broadcasting, telecommunication or e-services? Do you supply your service to other EU member states? Do I hear yes and yes? Then listen in.

If you supply your digital services to EU non-business customers and do not only sell your e-services through a third party platform or marketplace, then VAT MOSS is going to aid you. It’s business to consumer supplies that are affected, selling purely to other businesses will not affect your VAT.

MH 120216 Est 30If you are wondering what has changed, the ‘place of supply’ rule has. The place of supply for business to consumer (non-business customer) supplies has changed from the country where the supplier belongs to the Member State of the consumer. The consequence is that VAT will be due in each Member State in which supplies are made. What VAT MOSS allows you to do is register under one scheme in one EU Member State rather than potentially 28 Member States of your non-business customers (TIME SAVER!!). Registering for VAT MOSS will allow you to account for any VAT due to any Member States through one return. The aim is to reduce the administrative burden and associated costs of multiple VAT registrations.

This will also work for you if you are not registered for VAT in the UK, you can voluntarily register under the special scheme for digital businesses. This will not make your UK sales viable if you are under the VAT threshold, you will be able to submit nil returns under this special scheme.

Essentially this return is a list of all Member States that you have supplied to along with the countries VAT rate, net sales and VAT due in that country. This calculation will come down to you and whether you invoice in the countries VAT rate or invoice gross (VAT inclusive).

The VAT MOSS returns are quarterly at the end of March, June, September and December and are due to be submitted by the 20th of the following month. HMRC will then distribute the information and tax between the relevant tax authorities.

Who is affected?
• Broadcasting includes the supply of television or radio programs to a schedule by the person that has editorial control of those programs
• Telecommunications include the services of sending or receiving signals by wire, radio, optical or other systems and includes fixed and mobile telephony, fax and connection to the internet
• E-services includes video on demand, downloaded applications, music downloads, gaming, e-books, anti-virus software and on-line auctions.

Who is making the supply?
This area becomes slightly trickier especially when supplied via an internet portal, gateway or market place. Care must be taken to determine whether the digital service is made to the consumer or the platform. If you are using a platform as an agent, then you may not be affected as the platform may be making the business to consumer supply of digital services.

Customer Status
The easiest way to determine a customer’s business status is obtaining the company’s VAT registration number, though there are alternative forms of evidence confirming business status.
Invoices need to be raised within the guidelines of the Member State where the consumer is located. The majority of Member States do not require VAT invoices to be issued for cross-border supplies, so charging gross figures will be accepted.

If you need any help, please let us know… It is what we are here for!