To follow on from previous articles, last week saw a change in UK VAT law.
The UK now has an online VAT-MOSS system to collect the overseas VAT payable by UK based suppliers. However, to use the VAT-MOSS system a UK business must first be registered for UK VAT.
For businesses not currently VAT registered in the UK, you can register for both UK VAT and the VAT-MOSS system online in the same application. After registering, small businesses won’t need to charge VAT to their UK customers, as long as the UK sales total value is below the VAT registration threshold (£81,000). This is a change in the VAT law, as a business which was VAT registered was previously required to charge VAT on all its sales from the date it became VAT registered.
HMRC have made it clear that for small businesses to protect their UK customers from paying VAT, they don’t have to formally split into two entities (eg UK Ltd and Europe Ltd) to use the VAT-MOSS. Only one business entity will exist, but for every quarter it’ll need to file nil VAT returns in the UK, and VAT-MOSS returns for the overseas VAT collected in each period.
If you’d like any help with your VAT returns or have any questions about your overseas VAT obligations, just give us a call on 01782 279615.