"From 1st January 2015, when you sell digital services across international borders you will have to collect information about your customers to determine if they are businesses or not, and where they are based. Where your international sale is to a non-business customer, from 2015 you will have to charge that customer VAT of the country where he or she is located (if that's in the EU). You will also have to register for VAT in your customer's country. This is because the VAT threshold for traders selling into other EU countries is zero."
http://www.book-keepers.net/the-bkn-blog/3037239
So if a UK business that isn't VAT registered sells something to a non business customer in say France for £1, they have to register for VAT with the French authorities, and pay the French government 20p (or whatever their VAT rate is)?
Or they have to put in place a system that blocks sales to non business EU customers, but allows sales to EU business customers and anyone in the rest of the world?
That stuck out with me as well when I read it earlier.
I've always said there should be a zero threshold in the UK as well - or maybe £10,000 but certainly very low.
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Never buy black socks from a normal shop. They shaft you every time.
I'm really going off the idea of going back to accounts work . Once upon a time there were some irritating rules, but at least they had some sense to them, but the nutters who invent this stuff can't ever have been allowed out in the real world!
I'm really going off the idea of going back to accounts work
You and me both John.
Just had a quick read through (cheers Michelle) and I can't help but keep thinking wasn't it this Government that not so long ago was harping on about their office of tax simplification!
How much more simplification can we take before we all give up and go stacking shelves in Tesco's instead (which for the chargable hours that one gets in probably pays more).
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
On the one hand, there's the TTIP, the secret trade deal between the US and EU that's being stitched up at the moment, and on the other, there's things like this.
The TTIP includes an investor-state dispute procedure, where global corporations can sue governments over any legislation that affects their profits, in secret courts. So they can get any legislation on trade or the welfare of people scrapped without voters being able to do anything about it. Any barrier to their trade gets wiped out.
Stuff like this creates barriers to trade for any business that isn't big enough to be part of this, and the smallest businesses get hit hardest, but there's no system to allow us to challenge it.
I think governments think small businesses are those that aren't big enough to be global corporations, but are big enough to make multi-million pound donations to their party funds, and anything smaller is an irritation to be wiped out.
Apparently, (this is what I have been told, happy to hear its codswallop) - all this has been created because the EU countries were not happy about the other governments making revenue from cash spent by their own countrymen.
If you trade in multi countries, you can, apparently, use the MOSS to maximise your income by creating the lowest possible VAT bill. I have had the gist explained to me, and I am holding off doing the ATT course, as I am hoping this will become part of it, so I can get a better understanding of it. Finding a local training session on it, has proved fruitless so far, but I am keeping an eye out.
It would be interesting to know who the winners and losers will be.
I suppose that's a fair reason Michelle, but maybe a bit of intelligence is needed in applying it!
It wasn't clear from my quick read through all the gobbledegook how it affects businesses that aren't VAT registered, but that seems the biggest problem to me, and what I picked up on from the blog post. Is it really worth all the hassle and expense for governments to make an extra couple of Euros from tiny businesses who occasionally make a small sale in another country?
I've been asked about this on a Facebook group full of people it will affect, and had a search on AccountingWeb. This is what I wrote. Does anyone agree or disagree with it? Or want to add more gory detail?
I've read part way through this, and it's no more encouraging. - It seems pretty clear that it applies to businesses that are not VAT registered. - If you are based outside an EU country that you sell to, you have to charge VAT under that country's rules. - You can either register for VAT in each country you sell into (but you don't need to register in the UK if you're under the limit) or - You can register for VAT in the UK, and use the system that HMRC run to account for the VAT (but you still need to follow each country's rules) - You need to ask every customer what country they live in (so you can charge the correct VAT if they're in the EU, or not charge it if they're in the rest of the world, or in the UK if you're not VAT registered) - If they're in the EU and are a business, you have to ask for their VAT number if they have one, and you don't charge them VAT (I think, but it needs more checking)
The alternative seems to be to ask every customer where they live, and refuse to sell to them if they're in another EU country.
. Once upon a time there were some irritating rules, but at least they had some sense to them, but the nutters who invent this stuff can't ever have been allowed out in the real world!
