Digital Services and the New VAT Rules
From 1 January 2015, businesses selling or providing digital services directly to the consumer such as broadcasting, telecommunications and e‐services will have to declare and account for VAT in the country where the customer is based. The digital supplies will be taxed at the VAT rate in the consumer’s member state.
A good rule intended to clamp down on the internet giants such as Amazon but with consequences for SMEs that were possibly not anticipated.
First of all do be clear that your business supply these digital services? ‘Digital services’ include:
broadcasting ‐ the supply of television or radio programs
telecommunications ‐ fixed and mobile telephony, fax and connection to the internet
e‐services ‐ video on demand, downloaded applications (or ‘apps’), music downloads, gaming, e‐books, anti‐virus software and online auctions
But it does not for example include:
Using the internet to sell tickets for an event
If you use a platform such as Amazon to sell your products – they then are responsible.
But before you panic read on…..
If your business supplies digital services to consumers (B2C), it is you supplying the services that are liable to pay the VAT to the tax authorities.
If you are UK VAT registered, and are making B2C digital service supplies to customers in other EU Member States, you can register for the VAT Mini One Stop Shop (MOSS).
MOSS will enable you to register just once (in the UK) and submit a single MOSS VAT return and payment each quarter for all your cross‐border supplies of digital services. If you register for MOSS to account for the VAT on all your EU cross‐border supplies, you can use the European Commission's EU VAT Web Portal to determine the VAT information (e.g. VAT Rates, VAT Invoicing requirements) in each Member State.
If you are not UK VAT registered, and you are not using a digital platform, store or marketplace to supply digital services, then you will need to:
• Register for VAT in each Member State that you supply digital services, or
• Voluntarily register for VAT in the UK and then use the MOSS
Provided a business organises and operates its cross‐border digital services business entirely separately from its UK domestic business, we understand that HMRC will allow that business to register for VAT so that it can then register to use MOSS but will not have to pay UK VAT.
You will need to determine if your customers are 'taxable persons' who are in business and have provided you with their VAT Registration Number (VRN), or other information that they are in business, because if this is the case, you will be making business‐to‐business (B2B) supplies which will be dealt with under existing EU VAT rules, rather than B2C supplies.
If you do decide to register and use MOSS to account for the VAT on your supplies to customers in other Member States you will need to:
Submit MOSS VAT returns on a calendar quarterly basis, including ‘nil’ returns if you do not make any digital service supplies; be able to determine where a customer is located in order to determine the VAT rate that applies and to complete the MOSS Return, by for example obtaining information such as the customer’s billing address, IP address or telephone number.
More information: VAT on digital services in the EU https://www.gov.uk/vat‐on‐digital‐services‐in‐the‐eu
Register for the VAT Mini One Stop Shop https://www.gov.uk/register‐and‐use‐the‐vat‐mini‐one‐stop‐shop
Guidance on supplying digital services and the VAT Mini One Stop Shop
CJRS Update May 29
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Update on the Job Retention Scheme - May 2020
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Commercial Rents and help for Tenants during the Pandemic
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Covid-19 more business funding announced
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How to make a Job Retention Scheme claim
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Job Retention Scheme
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3 new funds for the creative community in Scotland announced.
Funding programmes designed to provide further support to sustain the country’s creative community during the COVID-19 outbreak:
Covid 19 Limited Company Directors and Dividends
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Self-employed workers - Covid-19 support
The scheme to help self-employed workers who have been hit by the COVID-19 crisis has finally been announced
VAT Deferral - Covid-19
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Coping for business during the Covid-19 Crisis
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More about accessing the Business Support Fund
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Keep in in touch with your customers now will pay dividends after the crisis
Some advice about using Digital Tools and Social Platforms during the Covid-19 Crisis
CV-19 Employers Update
We offer some advice for employers regarding self-isolation as of today but this may change and we will keep you updated.
CV-19 affects Landlords - what the government expects
The Scottish Government issued a statement about Rented Accommodation. We have extracted from the statement information relevant to private landlords.
IR35 and the implications
HMRC will apply new rules on IR35 from 6 April 2020, much to the disappointment of those who have campaigned to halt the change.
Much has already been done to improve the administration of IR35 and there is more to do on many of the areas identified for improvement.
Deregistering for VAT
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If you thought the age of apprenticeships was over, think again
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The battle between cyber criminals and companies is constant and on-going
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Business mileage payments for electric and hybrid vehicles.
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Employing Children, Save Tax and keep them busy this summer
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Here’s the answer - employ them and save on tax at the same time
Paying salaries to your children is a good way to reduce your taxable profits but how should you do it legally?
Company Vehicles - choose wisely
Choosing the right vehicle(s) and the right finance options for your business is an important decision and a costly one if got wrong.
What can you and should you be claiming for business expenses
Just what can you and should you be claiming for business expenses. This is one of the most frequent questions that an accountant is asked.
How to access £9 billion public sector spending with SDP
The Supplier Development Programme supports businesses competing for the £9 billion annual spend of the Scottish public sector.
A new business can struggle to get the pricing right - we offer some simple tips
This is something, as Accountants, we come across time and time again. It’s often the reason for early business failure and it’s completely avoidable. Here are some simple tips.
Find out if your suppliers are still performing as well as you want them to
We found this good article courtesy of bluqube who offer accountancy software and thought you might find it interesting.
5 ways businesses will benefit from a Brexit VAT health check
When the UK leaves the EU, the cross-border VAT environment for businesses will change.
Performing a VAT health check now will highlight practical measures that businesses can take to ease the transition and minimise risk
Business Loans Scotland provides gap funding to businesses that are looking to grow but need external finance to make it happen.
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Facebook makes it easy to compete in the marketing stakes
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It's a risky strategy NOT to plan ahead for retirement when self employed. But many self employed are already struggling to keep heads above water without finding extra funds for pensions
Information from HMRC on Making Tax Digital
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From April 2018, businesses, including everyone who is self-employed and those letting out property, will update HMRC at least quarterly
VAT Explained Part 3 - International VAT
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VAT Explained Part 1 - Taxes made clear
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When HMRC audit a business they look at the entire travel and expenses process
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Regain control of business costs
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Keeping an eye on employee expenses can vastly improve the company bottom line
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CIS returns must be submitted online from April 2016, sub- contractor verifications to be done online from April 2017 and there are also changes to those who can be paid gross
2016 Employment Law Updates
A useful snapshot of the latest employment updates. The changes to National Living Wage are undoubtedly having an impact on many small businesses.
No Dodges for Contractors
There aren’t any ‘dodges’ for Contractors with the new Finance Bill legislation.
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This is the first in our series of articles to help Contractors get started and run an efficient company.
Setting up your contractor company - Limited, Umbrella or PAYE?
Setting up your Company
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Bereavement Pay and Leave
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(We loved these - especially going to Italy for 5 years!)
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Here’s a very interesting point about tips and how to handle them. The way the tips are treated will depend on who receives them and who distributes them.
Christmas Gifts and Staff
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Tax: a Sign of Success?
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The Scottish rate of Income Tax will come into effect from 6 April 2016.
On 2 December 2015, HMRC will start to contact customers living in Scotland where records show that this is their main address, to inform them they have been identified as being a Scottish taxpayer.
What you need to know.........
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Sources of Funding
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- Having a strong personal connection?
We think these are all very important but we believe that the top component is TRUST.....
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All Priory Clients are entered into our brand new annual Prize Draw. A welcome gift for you just at the time of year when you might need it most.
Buy to Let - Profit or Loss?
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Click here to get our Top Twenty Tips for New Start Businesses today
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Late Payment Penalties
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“I don’t want distracted from my work and knowing Roddy and team are there covering my back allows me to get on with the work”
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Don't be Last Minute.Com
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