New UK online VAT registration service to launch on 20 October

Out-Law News | 24 Sep 2014 | 5:28 pm |

Businesses that supply broadcasting, telecommunications and electronically supplied services to consumers will be able to register for a new UK service that will enable them to submit all their VAT returns owed across the EU in one place from 20 October.

The VAT mini one stop shop' (VAT MOSS) system will open to registrants next month but only become operational from 1 January next year. HM Revenue & Customs (HMRC) said that as many as 42,000 UK businesses could register for the VAT MOSS scheme.

"The VAT MOSS will save digital services suppliers from having to register for VAT in every [EU] member state where they do business, removing a significant administrative burden," Sally Beggs, deputy director of indirect tax at HMRC, said. "Businesses with their main operation or headquarters in the UK will register with HMRC to use the service."

VAT MOSS is an optional service for businesses to use. It was developed following changes to EU VAT rules, guidance on which was issued earlier this year.

From next year, businesses supplying consumers with digital services, from providers of telecoms services to online subscription-access publishers and streaming service providers, will be required to pay VAT on those services based on where the consumers receiving those services live or are located.

To avoid businesses having to use a number of different systems for paying the tax to comply with the 'point of consumption' regime, EU member states have been developing tools to allow businesses to register for VAT only once. VAT MOSS is the system developed in the UK.