VAT MOSS lets businesses register and pay VAT to HMRC instead of having to register for VAT in up to 27 EU member states.
There are 2 types of scheme:
- Union VAT MOSS – for businesses based in the UK and EU
- Non-Union VAT MOSS – for businesses based outside the UK and EU
Union VAT MOSS
To use the Union VAT MOSS scheme in the UK, your business must:
- be based in the UK, or be a non-EU business with a fixed establishment in the UK
- be registered for UK VAT
- supply digital services to consumers where the place of supply is in an EU member state
You can only register for the Union scheme in the UK or one EU member state.
If your business turnover is below the UK VAT threshold and you have supplies of digital services treated as being made in an EU member state, you must register for UK VAT to use the Union VAT MOSS scheme.
Non-Union VAT MOSS
To use the Non-Union VAT MOSS scheme in the UK, your business must:
- be based outside the UK and EU
- have no fixed or business establishments in the UK and EU
- supply digital services to consumers in the UK and EU
You can only register for the Non-Union scheme in the UK or one EU member state.
How UK VAT MOSS works
Once you register your business for the scheme, you must account for the VAT due on any qualifying sales by sending HMRC a VAT MOSS Return and payment each calendar quarter. A qualifying sale is a cross-border supply of digital services to consumers where VAT is due in an EU country other than where your business is based.
This means you only need to send a single VAT MOSS Return each calendar quarter. You do not have to declare the VAT due separately.
HMRC will send the relevant parts of your return and payment to the tax authority of the country where your consumers are based.
Alison Brown
Partner at Sandsfordaccounts
Sandsfordaccounts provides a full range of online accountancy services