January 2015 new VAT rules. Less than a month to go – are you ready?
Ryan Bevan 29 December 2014 No comments
Time is running out! With less than a month to go until the new VAT rules for B2C supplies of Broadcasting, Telecommunications and e-services (BTE) come into effect now is the time to ensure that you are on track to have the required procedures and systems changes in place for 1 January.
Under the new rules the place of supply for EU providers of BTE services to consumers located in other EU countries changes from the place where the supplier is located to the place where the customer is located. This means that whereas until now a UK supplier would simply charge UK VAT on all supplies to consumer customers within the EU, from next year the supplier will be required to charge the VAT of the country in which the consumer is based. This means potentially charging the VAT of up to 28 different countries depending on where its customers are based.
As a facilitation measure the EU has introduced an optional VAT return process known as the Mini One Stop Shop (MOSS) which will enable businesses affected by these changes to include all its EU VAT on a single VAT return submitted to the local tax authority. The relevant VAT will then be reallocated to the various overseas tax authorities. Suppliers can if they prefer choose instead to register for VAT in every country in which they have customers, though the compliance burden of doing this is likely to be significant.
Suppliers affected by these changes should now check that they have addressed the following issues:
* Have you identified all your BTE supplies?
* Do you have the relevant evidence to prove where your customer is located?
* Can your billing system deal with charging multiple overseas VAT rates?
* Have you decided whether to register for the VAT MOSS scheme? Registration is available now via HMRC’s online system.
* If not, have you registered for VAT in every EU country where you have customers?
Further information on the new rules is available in an HMRC guidance document available here (https://www.gov.uk/government/publications/vat-supplying-digital-services-and-the-vat-mini-one-stop-shop/vat-supplying-digital-services-and-the-vat-mini-one-stop-shop) or contact us if you require further help.