VAT and the Mini One Stop Shop (MOSS)
26 February 2015 •
An important change took place on the 1 January 2015 regarding the VAT place of supply rules in respect of digital services.
The change in rules affects Business to Customer (B2C) supplies within the EU of:
1) Telecommunication services
2) Broadcasting services, and
3) e-services
As of 1 January 2015, instead of the place of supply for these services being in the country where the Business is established it will now be the country where the Customer is located. The old rules will continue to apply up until 31 December 2014.
A UK business supplying the above digital services to non-business customers (B2C) in other EU member states will therefore have to charge and account for the VAT according to the local VAT rules of the customers country. To properly account for the VAT under these new rules, the affected UK businesses would normally need to register for VAT in each EU member state in which they supply such services.
However, HMRC have introduced the Mini One Stop Shop (MOSS) system which will enable an affected business to submit one quarterly return and payment to HMRC to account for the overseas VAT charged to its EU customers.
In order to register for the MOSS system with HMRC, the UK business must be registered for VAT in the UK. There are special rules available for UK business that are not registered for UK but would still be caught under the local VAT rules of the country in which their customer resides.
This will represent an additional administrative requirement for those affected businesses and if your business provides telecommunication services, broadcasting services and/or e-services to customers in EU member states then please get in touch with us at Warrener Stewart in order that we may assist you.
Time is of the essence as the first VAT MOSS return will be for the quarter ended 31 March 2015, which will need to be submitted to HMRC by 20 April 2015. Payment of the VAT will also be due at this time.
If you have any questions regarding your tax affairs in general please do not hesitate to contact us on 020 7731 6163.