HMRC updates VAT mini one stop shop guidance

HMRC has issued updated guidance on registering for the VAT mini one stop shop (MOSS) scheme, with new information about invoicing, leaving the scheme and which return to use to declare VAT

VAT MOSS is a way of paying VAT on supplies of certain digital services if either a UK business makes supplies to consumers in other EU member states; or a business is based outside the EU and makes supplies to EU consumers.

For UK businesses making cross-border supplies where the place of supply is another EU member state, there is no registration threshold and VAT is charged at the rate due in the consumer’s country. Where a business based outside the EU makes supplies of digital services to consumers in the EU, the place of supply will be where the consumer is located.

Special rules apply to digital services. From 1 January 2019 the digital supplies threshold is £8,818. Below the threshold, the place of supply is the UK, while over the threshold, the place of supply is where the consumer is located.

HMRC’s updated guidance states that for supplies made from 1 January 2019, if a business is registered for VAT MOSS in the UK it will need to apply UK invoicing rules to supplies. It is not necessary to issue VAT invoices for supplies to consumers who are not VAT registered.

For any supplies made before this date businesses should follow the invoicing rules of the EU member state in which the supply has taken place.

From 1 January 2019, UK businesses may also be able to deregister from the MOSS union scheme as supplies will no longer be treated as being made in the consumer’s EU member state.

Businesses affected may be eligible to deregister from UK VAT MOSS, as sales to consumers in the EU are now treated as being made in the UK. They may also be able to deregister from UK VAT, if the total taxable turnover is below the UK VAT registration threshold.

From 1 January 2019, businesses established outside the EU making supplies of digital services to EU consumers may register for the Non-Union scheme even if they are registered for VAT in the EU for other reasons.

Guidance Register for the VAT Mini One Stop Shop scheme is here

Report by Pat Sweet

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