The introduction of the new VAT rules on the supply of electronic services is a month old. However there is still a lot of confusion out there.
Below we’ve dispelled a few of the myths:
We’ve also produced a check list to help you which has been published in Currencies Direct ‘Knowledge Hub‘ last week. Read our article to find out what you need to do. Getting ahead of the game is a lot less painful than playing catch-up.
The good news is the first VAT returns do not need to be filed until the 20th April which gives you time to iron out any teething problems whilst collecting the data. However you do need to make sure you are getting the invoicing correct straight away – different countries have different rules and regulations and VAT rates. The European Commission (EC) have produced a guide showing all the different VAT rates in each member state (EC speak for an EU country).
In the UK there has been a lot of lobbying to highlight the unfair impact on micro-businesses – and some concessions have been made – albeit small. HMRC have agreed to give micro-businesses more time to get their internal systems in place – there is leeway until the 30th June 2015. Those businesses currently below the UK VAT registration threshold may use their payment providers’ two pieces of evidence to validate the location of the customer.
Already many businesses are talking about not selling into Europe as the compliance headaches are too costly and time-consuming. If VAT MOSS gets implemented successfully, the focus will turn to the introduction of VATMOSS for goods – possibly within the next few years. With the UK government looking to export as the panacea for the weak economy, this may have a material effect on how the UK will compete in the international arena.