united-kingdom

Affected by VAT MOSS? We have some good news for you

If you provide digital services to consumers in other EU member states and your total turnover is below the £82,000 threshold you should read this news. On Friday (January 8th, 2015) simplifications were released for businesses trading below the VAT registration threshold.

It outlines the 2 main simplifications available to small businesses that make supplies of services such as telecommunications, broadcasting or electronically supplied services.

On 1 January 2015 the VAT place of supply for digital services supplied to consumers and other non-business customers inside the EU changed from where the supplier belongs to where the customer belongs. Businesses making these supplies became liable to register for VAT in each country where they supply digital services. Based on that document, suppliers of digital services must collect two pieces of non-contradictory information to evidence their customer’s location. Right now what is said in this Simplification is that HM Revenue and Customs allow UK businesses that are below the UK VAT registration threshold and registered for VAT MOSS to base their customer location decisions on a single piece of information provided to them by their payment service provider. The decision came after finding that small businesses encountered difficulties in obtaining 2 pieces of evidence. And that would be the first change.

The second change says that if activity is carried out as a hobby (i.e. only on a minimal and occasional basis), HMRC does not normally see this as a business activity for VAT purposes. HMRC will contact those already registered for VAT MOSS whose returns suggest they may not be in business.

Read more here

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