Good news from HMRC for UK SMEs #vatmoss

No primary category set

Now don’t get too excited, but we’re pleased to say that with not much more than 48 hours before the new VAT rules for UK vendors of digital goods come into force, there is a snippet of good news.

To recap on #vatmoss: the change due on 1st January will require sellers of digital goods (such as downloads, ebooks, music etc) to charge VAT based on the buyer’s location within the EU and not on the location of the seller as is currently the case.

Perhaps more irritatingly, the seller will have to verify the location of the buyer using two pieces of distinct information and retain that info for some years. Oh, and there won’t be a VAT threshold on such goods. You’ll have to start complying when you make your penny’s worth of sales.

There’s been much said and written about it on here and elsewhere.

But in new guidance from HMRC released today, there is a bit of good news. If you’re a micro-business trading below the £81k VAT threshold, they are loosening the proof they require to establish the locale of the buyer. Until the end of June, the confirmation of your payment provider will suffice. Find the full note verbatim below, you can find it online here:

Support for MOSS registered micro-businesses until 30 June 2015
UK micro-businesses that are below the current UK VAT registration threshold, and who register for the VAT Mini One Stop Shop (MOSS) may, until 30 June 2015, base their ‘customer location’ VAT taxation and accounting decisions on information provided to them by their payment service provider. This means the business need not require further information to be supplied by the customer. As payment service providers already collect and hold a minimum of 2 pieces of information about the member state where the customer usually resides, the transitional period, until 30 June 2015, will give micro-businesses additional time to adapt their websites to meet the new data collection requirements.

Now, it is a small and modest change but it does represent good news. Firstly, it does make a real difference to the smaller businesses who will have to implement the change from Thursday. Secondly, it also demonstrated that HMRC are will to listen and change in the face of persuasive pressure and that’s a good thing.

Several groups continue to lobby HMRC and the EU commission and we hope that they manage to elicit more good news soonest.

2 Responses

  1. Thanks for the update Dan.

    We are confirming and storing the two pieces of data to confirm the customers country and also applying the correct VAT rate to any digital products being sold through Create ecommerce stores – we’ve been working hard behind the scenes to make complying on the order processing as straightforward as possible for customers in the new year.

    Quick Q on the threshold and deferment, I haven’t been able to find a definitive answer so would be great if you know.

    If a customer has registered for VAT but deferred as they are under the threshold and selling digital products so they don’t need to charge the VAT to uk customers, do they also not charge VAT on any physical goods sold or is this only applied to people exclusively selling digital products and services? Do you know?

    Thanks in advance


  2. Thanks for helpful post.

    Q. If I live in Holland, but I’m working / on holiday in Portugal (For example) My Credit card is registered to my address in Holland, but my IP address will be the hotel that I am staying in….

    So two forms of proof means I can only make digital purchases when I’m in the country my card is registered to….

    so much for European mobility…?

    Strikes me as playing the violin while Rome (or Greece) burns!



eBay UK digital sales reporting to HMRC

eBay UK digital sales reporting to HMRC

2023 accounting and tax changes from HMRC

2023 accounting and tax changes from HMRC


HMRC amends Self Assessment deadline penalty


Making Tax Digital VAT update


eBay fulfilment crucial to attract Chinese sellers

ChannelX Guide...

Featured in this article from the ChannelX Guide – companies that can help you grow and manage your business.


Take a look through a selection of the latest articles on ChannelX

Register for Newsletter

Receive 5 newsletters per week

Gain access to all research

Be notified of upcoming events and webinars