Digital sales, the EU and VAT(MOSS)

There was a small uproar amongst online businesses a couple of years ago when it became clear that new EU regulations meant that sales of digital products (MP3s, ebooks and the like) to EU consumers would have to include VAT at the rate of the consumer’s (rather than seller’s) home country and that the seller would have to account for that VAT to the authorities of each country that they sold to. In the UK, this was simplified by VAT MOSS, the Value Added Tax Mini One Stop Shop, which lent its name to the whole kerfuffle. This is actually just the mechanism by which you can itemise your sales to each country in an HMRC (Her Majesty’s Revenue and Customs, i.e. the tax authorities) form so they can handle the payments to each country. But it was complicated by the fact that there was no threshold on digital VAT, meaning that UK businesses earning under £83,000, who had so far been exempt from the VAT regulations, would have to register as a VAT business in order to submit the VAT MOSS form. It’s two years on now and I need to set up some digital sales so I’ve been looking at what’s changed. Actually, very little – so far. Even Brexit isn’t going to make a difference as the EU considers the ruling applies to the whole world. So the requirement to account for VAT on sales to EU countries will still apply, although what effect Brexit will have […]