VAT MOSS, otherwise known as VAT Mini One Stop Shop, is HMRCs online service for declaring VAT on sales to consumers in EUR countries (B2C but not to VAT registered businesses).
From 1st January 2015 all businesses supplying digital services either had to register for VAT in each of the EU countries it supplies or register for VAT MOSS to declare the sales. Using this online service you can account for VAT due on these sales by submitting a quarterly return and payment to HMRC.
The return done via VAT MOSS has to be submitted quarterly by the 20th following the quarter end. Payment also has to be made by this date. HMRC will then forward the payment to the relevant countries.
Further information can be found here.
We have registered for and completed our first MOSS return for a client. The additional VAT totalled 22p! The client had to have their website updated in order to be able to charge different rates of VAT to different countries and the country sold to has to be easily extracted. We had to use the extracted information and calculate the net and VAT amounts from the gross sales figure for each country making purchases. This then had to be declared on the VAT MOSS return by 20th April and payment made. Then of course the actual VAT return needs to be adjusted when we do that later in the month as the net and VAT amounts won't be correct.
Why does HMRC and the EU have to make things so involved? There should be a threshold under which businesses do not have to deal with this as everybody is a loser in this situation.
Businesses who are not currently VAT registered because their turnover is under the threshold must become VAT registered if they supply digital services so that they can submit a VAT MOSS return. They will also have to submit a VAT return with nothing on it as they will not have to charge their customers VAT if they are under the threshold and cannot claim VAT. However they could claim back VAT on purchases or expenses which are wholly related to the sale of digital services. Crazy and so much more work and cost for everyone!
What do you think?
