If you run a business that provides online services, you may have come across the term VAT MOSS - but what exactly is it, and how do you register? Our guide will help you get to grips with it.
VAT MOSS is a way of paying VAT if your business supplies certain digital services to other EU countries.
A change in the law that was brought in on 1 January 2015 means that you now have to pay VAT based on the country where the customer bought your product, not the country the seller is based in.
VAT MOSS (which stands for Value Added Tax: Mini One Stop Shop) was introduced so that UK sellers could just pay VAT to HMRC, instead of having to register for VAT in every EU country.
The change to VAT was brought in to stop big corporations from reaping the benefits of setting up in countries with very low VAT, like Luxembourg, but because of the way the way the law is worded, certain small businesses were swept up in the net.
The law covers telecommunications, broadcasting, and e-services that are sold direct to consumers (rather than to other businesses). Most small businesses are not likely to be selling broadband to the French, but if any of your products come in digital form and could be purchased by someone in the EU, then you might need to register for VAT MOSS.
Say you run an Etsy shop where you provide PDF versions of sewing patterns. If someone in Germany were to purchase one of your PDF patterns, you would need to charge them German VAT.
To register for VAT MOSS you first have to register for UK VAT. Once you’ve done that, you’ll be able to add VAT MOSS to your HMRC account.
You need to register for VAT MOSS within ten days of making your first digital sale to someone outside of the UK. Once you’re registered, you then need to pay your VAT MOSS quarterly by the following dates:
It’s a complicated process that wasn’t designed with small businesses in mind, so if you’re still feeling a bit at sea then check out the government’s website for all the details.
Like a great number of things to do with trade between the UK and the EU, VAT MOSS could change once Article 50 is triggered.
We won’t know for certain what those changes will be until the government announces them, but we’ll update this article should needs be.
How has VAT MOSS changed how you run your business? Let us know in the comments
We create this content for general information purposes and it should not be taken as advice. Always take professional advice. Read our full disclaimer
22 July 2020 • 5-minute read
From the VAT threshold to registering for VAT, are you clear on your responsibilities for this crucial UK tax? Our guide is designed to…
6th Floor99 Gresham StreetLondonEC2V 7NG
Sol House29 St Katherine's StreetNorthamptonNN1 2QZ
© Copyright 2021 Simply Business. All Rights Reserved. Simply Business is a trading name of Xbridge Limited which is authorised and regulated by the Financial Conduct Authority (Financial Services Registration No: 313348). Xbridge Limited (No: 3967717) has its registered office at 6th Floor, 99 Gresham Street, London, EC2V 7NG.