Vat On Digital Downloads

[Waldo 96]

I've just been looking at https://www.gov.uk/guidance/the-vat-rules-if-you-supply-digital-services-to-private-consumers

 

I'm still a bit confused, would a business that is not VAT registered, have to charge VAT on digital downloads?

[tinfoilhat 11]

Thanks for that link. I'm none the wiser - particularly the need to register in an EU country - but its useful non the less!

[Jeffrey Shaw 90]

2 hours ago, Waldo said:

I've just been looking at https://www.gov.uk/guidance/the-vat-rules-if-you-supply-digital-services-to-private-consumers

 

I'm still a bit confused, would a business that is not VAT registered, have to charge VAT on digital downloads?

I doubt that a non-VAT-registered trader is permitted to charge VAT on anything at all; but I stand open to correction! Best to consult either HMRC or your accountant.

Edited June 16, 2021 by Jeffrey Shaw

[MJ01 439]

3 hours ago, Waldo said:

I've just been looking at https://www.gov.uk/guidance/the-vat-rules-if-you-supply-digital-services-to-private-consumers

 

I'm still a bit confused, would a business that is not VAT registered, have to charge VAT on digital downloads?

If you're not registered for VAT, you don't charge VAT.

VAT is some times dressed up as being really complicated (probs to enable VAT 'consultants' to take your pants down) - but most of it is quite straight forward really

[tinfoilhat 11]

5 hours ago, MJ01 said:

If you're not registered for VAT, you don't charge VAT.

VAT is some times dressed up as being really complicated (probs to enable VAT 'consultants' to take your pants down) - but most of it is quite straight forward really

So if sell digitally to the EU I need to:

 

VAT accounting options for UK businesses supplying digital services to consumers in the EU

The place of supply will be where the consumer is located. You must either:

• register for the Non-Union VAT MOSS scheme in an EU member state
• register for VAT in each EU member state where you supply digital services to consumers

It seems needlessly complicated.

[Waldo 96]

11 hours ago, tinfoilhat said:

So if sell digitally to the EU I need to:

 

VAT accounting options for UK businesses supplying digital services to consumers in the EU

The place of supply will be where the consumer is located. You must either:

• register for the Non-Union VAT MOSS scheme in an EU member state
• register for VAT in each EU member state where you supply digital services to consumers

It seems needlessly complicated.

Do you have a source for that please?

 

I'm also wondering if this assumes a business is already VAT registered?

 

You're absolutely right though, it's needlessly complicated for small businesses.

[tinfoilhat 11]

26 minutes ago, Waldo said:

Do you have a source for that please?

 

I'm also wondering if this assumes a business is already VAT registered?

 

You're absolutely right though, it's needlessly complicated for small businesses.

The link in your OP!

[Waldo 96]

1 hour ago, tinfoilhat said:

The link in your OP!

Ah yeah, doh, thanks!

 

Looks like the MOSS scheme is no longer available from 1 Jan 2021 (Brexit?).

 

https://www.gov.uk/government/publications/vat-mini-one-stop-shop-non-union-return-guides

 

So that means a business would have to register (and no doubt submit regular returns) with each individual country in the EU, where it sells digital downloads.

 

Or alternatively, use a payment provider to process online payments and handle relevant taxes (payment provider will themselves be VAT registered and so VAT will be applicable to sales made inside the UK, even though the business themselves are not VAT registered).

 

That's the situation with Apple, Google etc; they are acting as some kind of agent, process payments, collect VAT which they then pay to the relevant authorities. There's a name for it, it's <something> agent. I looked in to this a few years ago, and believe, even if you're VAT registered, you don't pay VAT on income from Apple, Google, etc; as VAT has already been applied, when the sale was made between Apple and the customer.

Edited June 17, 2021 by Waldo