Digital services - changes to VAT rules from 2015
From 1 January 2015 any UK business that supplies broadcasting, telecommunications or electronic services (collectively known as BTE) to any non-business customer within the EU will be liable to pay VAT in that country at the rate charged by that country. There is no change to VAT on sales to other businesses regsitered for VAT within the EU.
Apart from the telecoms, music and TV industries, the main effect will be on small companies will be for those who sell software or downloadable information.
To avoid companies having to register for VAT in every EU country where they make sales, HMRC has introduced a mini one stop shop (MOSS) where a single quarterly return can be submitted to cover all the VAT. It will have to be completed, and the tax paid, within 20 days of the end of each calendar quarter.
Another change is that records relating to BTE sales must be retained for ten years, as opposed to the normal six years for UK tax records.
If you think that this might affect you, please contact us for further advice.