UK VAT registered business supplying B2C digital services in the EU have until 10 February 2021 to register under the EU non-union MOSS scheme for January 2021 supplies.
Mini One Stop Shop (MOSS)
Digital supplies are one of the exceptions to the general Place of Supply (POS) rules for VAT. The default rule for 'Business to Consumer' (B2C) supplies of services is that the POS is where the supplier is established. The rules for digital services instead move the POS to where the customer is located.
A business supplying consumers across Europe is faced with the prospect of having to register and account for VAT in every EU territory in which the consumers are located. In order to reduce the administrative burden on businesses across the EU, the Mini One Stop Shop (MOSS) scheme was established. This allows the supplier to register in their own Member State and fill in one VAT Return for all supplies. VAT is paid in the supplier's territory using the relevant rate of VAT in the consumer's State. The supplier's tax authority remits this VAT to the relevant State.
The UK's VAT MOSS scheme will no longer be available from 1 January 2021 for those UK businesses making digital supplies to the EU. These businesses have two options:
- Register and account for VAT in each customer's EU Member State.
- Register for the EU Non-Union MOSS scheme in an EU Member State of the supplier's choice. This allows the business to continue to file one VAT Return for all supplies and account for VAT in one territory.
Pre-1 January 2021, as the UK was still in transition from the EU and the EU de-minimis threshold for reporting applied. Only businesses with relevant supplies in excess of £8,818 (€10,000) needed to register for MOSS. If the UK business was not required to register for VAT in the UK and below the de-minimis for MOSS, it could de-register for VAT completely. A business still required to register for VAT in the UK would be required to account for UK VAT on the B2C digital supplies instead.
Post-31 December 2020, this threshold no longer applies to UK businesses. Any UK business making B2C digital supplies to European consumers will need to account for VAT in the consumer's territory.
UK businesses wishing to take advantage of the EU Non-Union MOSS scheme have until the 10th day of the month following the month in which the first supplies to the EU are made. Businesses making supplies to the EU in January 2021 will have until 10 February 2021 to register.
Useful guides on this topic
Place of supply: Services
The Place of Supply (POS) of a service determines whether the supply is within the scope of UK VAT and whether VAT is payable on that supply.
Place of Supply: MOSS
Simplified VAT compliance option for digital supplies across Europe. Who is affected and how does the scheme work?