If, like our Manchester accountants, you’re active on social media networks, you may have spotted the outcry over ‘VATMOSS’ over the past few days.
This is a new piece of legislation due to come into force from January 2015, designed to charge VAT on digital products sold to EU consumers at the point of purchase, rather than the point of supply.
It means that if you are a supplier of digital content in any form – text, images, video and so on – based in the UK, you must take steps to check the physical location of your customers, and charge VAT at the appropriate rate for their jurisdiction.
The rules apply only to customers in EU member states, and appear to only apply to B2C transactions, but significantly you do not need to be trading above the normal VAT threshold in order to be affected.
In preparation, HMRC has launched MOSS, or ‘Mini One-Stop Shop’, as a single point of reference for VAT reporting.
By paying all of the relevant VAT to this single system, HMRC say they will then divide up your contribution and send it on to the appropriate EU member states.
However, many sole traders and micro-businesses have raised concerns that the costs associated with VATMOSS could drive them out of business.
If you are concerned, our Manchester accountants can help you to work out your exposure, and make the necessary preparatory arrangements in time for January 1st.
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