HMRC offer clarification on VAT MOSS #VATMOSS

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Enterprise Nation, the online community for small businesses in the UK, have been exercising their lobbying muscle in the past few days with HMRC regarding VAT MOSS. If you are a businesses that offers paid-for digital downloads from the UK to EU this will affect you, so read up on the basics here.

In tandem with a number of small businesses that are impacted, EN, led by Emma Jones MBE, have been talking to government ministers and also HMRC to clarify what the rules actually are. No small task.

These negotiations and efforts have been successful so far in that they have elicited some clarification from HMRC of the rules, which you can read on the EN site here. There is some good news.

For the record (and for what it’s worth), Tamebay thinks these rules are onerous and unnecessary and the result of unintended consequences. It seems to us that no UK SME should be subject to VAT rules that are any different to those applicable to sellers of physical goods and the UK VAT threshold should apply to them as to others.

We’d prefer if VAT MOSS was not implemented at all for small businesses below the UK VAT threshold. And even then, taxing SMEs on the basis of where a download customer is (not on them as vendors) seems quite ludicrous and not at all the intent of the law which sought to punish off-shoring tax evading multi-national businesses.

In an ideal world the application of the VAT MOSS rules should be delayed for at least 6 months until they can be effectively reformed by HM Government renegotiating with the EU. As it stands the rules will be implemented on 1st January 2015.

We fully support all of the various campaigning efforts to bring this damaging bit of regulation to the eyes of government. And we do hope sense will prevail. We also hope that service providers like PayPal and Amazon weigh in to make compliance easier in the short term.

If it doesn’t, in this article Simon Dunant takes a proactive stance and looks at how you can comply and get around VAT MOSS.


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