Supplying Digital Services and VAT

Following the press coverage of the new legislation that commences in January 2015 at the weekend and due to our eagle eyed Arundel Manager, Alison Brown bringing this to our attention we’ve sought a bit of clarification.  MNC Accountant,  Ruth Anscombe of Shore Accounting had this to say: 

The changes relate specifically to supplying digital services, it’s not general online selling.

Place of supply for VAT purposes, when selling within the EU, is a real pain, it’s unnecessarily complicated.  The main issue is that if you sell digital services outside of the UK, within the EU, there are changes that affect you, which include meaning that you may need to register for VAT and calculate VAT charged on your sales based on where your customer lives, not where you are. This applies even to non VAT registered businesses who are nowhere near the UK VAT threshold.

On the face of it does look as though it may have implications for some digital service supply traders and may have an impact on small businesses. However, don’t take our word for it, do your own research, as a business person you have a duty to yourself to be in possession of all the facts and how the changes relate to your operation.  Talk to your accountant before January, and check the links below.    

VAT: supplying digital services and the VAT Mini One Stop Shop

If you feel strongly then there is also a petition you can sign to urge the government to take action.


Uphold the VAT Exemption Threshold for businesses supplying digital products

You can also contact Ruth at Shore Accounting, for further advice.
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