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VAT MOSS scheme - does it apply?

self employed person selling digital services to other UK customers

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I have a new client, who is selling subscriptions to an online teaching site for pianists. The customers pay a monthly subscription for access to live tutorials and interactive forums etc. He is self employed and not anywhere near the VAT threshold yet. However the business is growing rapidly so will probably hit the threshold in the next 12 months. My question is does the MOSS scheme apply if the sales are only to UK customers? Or is is only for outside of UK but within the EU customers? I've tried researching and gone round in circles so any help would be really appreciated thank you.

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By paul.benny
19th Jun 2019 09:21

Your client does not need to get involved with VAT MOSS if his clients are only in the UK

From VAT741a para 15
"VAT MOSS is an optional, simplified, way of declaring VAT on B2C supplies of digital services in EU member states where you are not established."

You should be able to find the other information you need elsewhere in that paragraph

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By williamsaccounts
19th Jun 2019 09:32

Thank you for clarifying, that's really helpful. Also he seems to think VAT won't apply to his services as there is 'human interaction' on the website? I don't suppose you are aware if there is a rule regarding this please?

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By paul.benny
19th Jun 2019 09:40

Take a look at the rules on digital services.

It may not be clear cut whether your client is in scope. Either way, I would be sure to document the rationale, so that if HMRC take a look, you can justify your position to them.

Of course, it may well change post-Brexit, so be prepared to revisit.

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By Vile Nortin Naipaan
19th Jun 2019 10:33

If he is not operating through a limited company, and is "providing tuition in a subject ordinarily taught in a school or university" then it may well be exempt, irrespective of how the teaching is delivered. As has been indicated, probably worth paying for some expert advice and putting it on the file.

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