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VAT on online courses

Charging courses in dollars - what's the VAT implication?

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Hi everyone,

It's been a while since I've posted but I hope you are all well!

I have a VAT query which to be honest I'd love some advice on - basically a client is going to sell online courses. They can be bought anywhere in the world and will be charged in USD.

I'm not sure of the VAT implications here (he is already registered) - would VAT be due JUST on the courses that are bought in the UK?

Thank you in advance!

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chips_at_mattersey
By Les Howard
06th Oct 2021 14:26

1. Is the client a corporate, or non profit?
2. Are customers private persons or businesses?

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Replying to leshoward:
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By jaybee661
06th Oct 2021 14:34

Thanks for the response Les - the client is a corporate (UK Ltd Co) and the customers could be either to be honest.

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Jason Croke
By Jason Croke
06th Oct 2021 14:39

Need more detail as the VAT on online training is very specific to the precise facts.

Are these training courses for consumers (B2C), just other businesses (B2B) or both?

What is the delivery method of the online course, is it a live host doing a live lecture to the viewers or is it a pre-recorded video that the viewer can pause, rewind. is it just a download of a .pdf or other documents or a combination of all of these formats?

Link here is from a University but it explains things quite well.
https://blogs.ucl.ac.uk/digital-education/2015/04/24/online-courses-as-d...

Stage 1 is to determine if what is being supplied is a digital service or not. If its not a digital service, then its just a normal service and you follow the normal place of supply rules for services (B2B customer outside scope of VAT/B2C customer UK VAT applies).

Stage 2. If it is a digital/e-service then for consumers (B2C) your client will need to register for MOSS (Mini One Stop Shop) if they are selling to EU consumers. If selling to other EU businesses, then its outside the scope of VAT.

HMRC guidance on digital services here
https://www.gov.uk/guidance/the-vat-rules-if-you-supply-digital-services...

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Replying to Jason Croke:
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By jaybee661
06th Oct 2021 14:42

Hi Jason, thanks so much for your detailed reply. They will consist entirely of pre-recorded video-based material but I guess the problem here is it could be either individuals OR businesses that use them, as they're software tutorials for a piece of software that's used all over the world. Maybe I need to speak to HMRC!

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Replying to jaybee661:
Jason Croke
By Jason Croke
06th Oct 2021 15:10

HMRC aren't going to help, they'll just refer you to the guidance, you can ask for a non-stat clearance and request an opinion in writing but they'll still use their own guidance as the basis of any answer.

If we look at that link to UCL, it has a table (which is extracted from HMRC's Notice) states that a pre-recorded video is a digital service and is electronically supplied. So that is Stage 1 sorted, we now know what the training is, a digital service. No uncertainty that it might be something else/not a digital service.

So Stage 2, now that we know they're digital services, if sold B2B then its outside the scope of VAT (must have proof customer is a business, it should be obvious if they are a GmbH, SpA, Ltd or Inc, etc) else they are treated as consumers and if consumer is in EU then you need to charge them their local VAT (Charge French consumer French VAT), so this is where MOSS kicks in.

MOSS is an EU scheme, you cannot register for it with HMRC, you'll need to register in an EU member state.

It may be easier to just not sell to EU consumers (depends on what portion of turnover they make up).

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Replying to Jason Croke:
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By jaybee661
07th Oct 2021 08:23

Again, thank you so much Jason. Brilliant level of detail, much appreciated.

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By Matrix
06th Oct 2021 15:44

Your client will need to register for non union VAT MOSS.

https://simplyvat.com/how-to-report-your-digital-supplies-on-moss-from-1...

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