What is the Mini One Stop Shop (MOSS)?
The Mini One Stop Shop allows taxable persons (such as businesses) who supply digital telecommunication services to non-taxable persons within any member state of the EU, to account for their VAT on all services supplied in the member state that they are operating from. This allows businesses who supply services to several member states to circumvent registering in each member state they make sales in and instead register their VAT under one jurisdiction, avoiding the need to declare the VAT for each location separately, which could amount to up to 27 locations.
The Mini One Stop Shop Scheme (MOSS) came into force in 2015 and has saved many businesses significant administrative burden since it began. Services covered under the MOSS scheme include;
- Website hosting
- Supply of software
- Access to databases
- Downloading apps or music
- Online gaming
- Distance teaching
VAT MOSS must be registered by businesses planning to utilise its benefits, by the 10th day of the month after your first digital service sale. For example, if your first digital services sale is on 8th January then you must register by 10th February, and your VAT MOSS sale will be back-dated to the date of your first sale.
When applying and operating with the VAT MOSS scheme, there are two avenues your business may go down:
- Union VAT MOSS – for businesses based in the EU
- Non-Union VAT MOSS – for businesses based outside the EU
How to use the VAT MOSS Scheme in the UK before January 1st 2021:
Union VAT MOSS
To use the Union VAT MOSS scheme in the UK, your business must:
- be based in the UK, or be a non-EU business with a fixed establishment in the UK
- be registered for UK VAT
- supply digital services to consumers where the place of supply is in an EU member state
Non-Union VAT MOSS
To use the Non-Union VAT MOSS scheme in the UK, your business must:
- be based outside the UK and EU
- have no fixed or business establishments in the UK and EU
- supply digital services to consumers in the UK and EU
What will change after the end of the transition period?
UK businesses who utilise the benefits of the VAT MOSS scheme will have to re-register under the ‘non-union’ MOSS option. This will mean registering their VAT MOSS scheme in another EU member state to continue to benefit. The same will apply to businesses who are currently using the non-union method and registered for VAT MOSS through the HMRC. To continue to use the benefits they will have to re-register their link to the scheme through another member state. This may also mean, however, that businesses who operate with the EU and UK may require a traditional VAT registration in the UK.
Applications for re-registration for businesses operating from the UK must be as before, the 10th day of the next month after their first digital sale, with the expectation of several registrations to be on the 10th of February 2021. Businesses will not be allowed to pre-register and will only be allowed to re-register their VAT MOSS Non-Union scheme after the UK has officially left the EU.
How can Animo help?
If you are currently using the HMRC in the UK, as your member state for the VAT MOSS scheme, our offices in Dublin (Ireland) can provide a fantastic opportunity and support in regards to re-registering through the non-union VAT MOSS scheme, using Ireland as the anchor member state. Having a member state so near-by to the UK, that operates in a similar way and without the added complication of a language barrier (for those businesses who are based in predominantly English speaking jurisdictions) allows an optimal opportunity for businesses who are currently considering their options.
Animo is well versed with operating throughout multiple jurisdictions, and we ourselves have operations in both the UK and two other EU member states. Following the end of the transition period, and especially in relation to VAT MOSS scheme, we want to help our clients as much as we can. Our offices, both based in the UK and based in Ireland welcome any enquiries on best practice following the end of the transition period, and how best to prepare.
Get in touch with us today by calling us on +44 (0)207 060 0835, emailing us at firstname.lastname@example.org, or filling in a contact form below, if you have any enquiries on the above-mentioned VAT MOSS scheme or any other business queries. For more information on how to prepare your business for the end of the transition period, have a look at our previous article, ‘How should you be preparing to trade with the EU from January 2021?’, and review the government guidance.