I have a limited company which is not VAT registered and have an online store which sells physical items to the UK and Ireland - I am soon to extend this to World Wide.
I wish to sell products which may be considered digital products and therefore the EU VAT Place of Supply Rules would apply.
I am trying to find clarification as to how best approach the handling of the VAT.
My customers will be a mixture of B2C and B2B - and some of the B2B customers would be VAT registered, and some not.
What is the best course of action for me to take so that I do not need to charge VAT on the rest of my products?
I have found this paragraph online (https://theaccountancycloud.co.uk/news/vat-rules-on-digital-service-businesses):
HMRC has also updated its guidance recently, saying now that if you who want to use MOSS and your turnover is below the UKs £85,000 VAT threshold (2017/18) then there will be a simplified registration arrangement. This will allow you to register for UK VAT and MOSS, receive a UK VAT number, but NOT be liable to pay VAT on UK sales.
Am I correct in understanding that I need to:
- Register for VAT using the 'simplified' arrangement to receive a UK VAT Number
- Register for the MOSS service
- Charge the relevant VAT only on my digital products/services to any B2C customer in the EU
- Do not charge the relevant VAT on my digital products/services to any B2B customer in the EU
- Do not charge any VAT on digital products/services to any customer outside the EU
- Do not charge any VAT on other physical products
- Every quarter, pay HMRC/MOSS/Taxman the VAT collected only on the digital products sold to B2C customers in the EU
- Do not claim back any VAT for any purchases made by the company
