Not to be confused with somewhere you might pop in to buy a pint of milk, MOSS is short-hand for the online portal which UK businesses will start using from 2015. The portal is a tool used specifically to account for the VAT owed by businesses, in respect of digital services provided to customers in other EU countries.
We mentioned this new rule in our July 2014 newsletter, where ‘digital services’ were defined as including many products, such as:
- music downloads
- video on demand
- electronic books
- software purchased by download
- online games
- anti-virus services
- sales of data or images online
- charges by online auction sites
- automated learning or exams.
From 1 January 2015 onwards, when selling a digital service to someone in another EU country who isn’t a business (ie an individual, Government body or perhaps a charity), you must have the VAT accounted for in the customer’s country. This means your invoice will need to charge VAT to your overseas customer at the rate that applies in their country, and then pay the VAT to the relevant tax authority.
The EU is made up of 28 countries, so it’d be a nightmare to complete quarterly VAT returns in each country you have customers. This is why there’s the need for an online portal (MOSS) to account for and pay the VAT in one go.
Provided you’re registered for VAT in the UK, you can register for the MOSS portal now – see www.gov.uk/vat-on-digital-services-in-the-eu – but there may still be quite a lot of work for accounting staff to do:
- you need to know what the VAT rates are for the countries you trade in, and keep up-to-date on any changes
- your VAT invoices must comply with the local regulations – these are different across the EU so you need to stay on top of it, and make sure they’re correct
- irrespective of the periods you use for UK VAT returns, the online returns must be made quarterly
- MOSS VAT needs to be electronically paid by the 20th of the month following the quarter-end, but payment can’t be made by direct debit – this means manually submitting the payments for each quarter
- you must keep your sales records for 10 years because every EU country (the ones you trade in) has the right to inspect them.
If you’d like help with this, please just get in touch with us on 01782 279615.