The EU departure will mean important changes for UK businesses that sell broadcasting, telecommunication and electronic (BTE) services to non-business customers (B2C) inside the EU and which are currently declared to VAT purposes under the VAT MOSS scheme. The changes are:

• The annual £8,818 de minimis sales threshold ends – it will be zero from 1 January 2021.
• UK businesses will need to register and submit returns and pay tax with the Non-Union VAT MOSS scheme, instead of the UK VAT MOSS scheme which will no longer be available.

Another option is for UK businesses to separately register for VAT in each EU country where BTE sales are made to customers (B2C). If this option is taken, there will be no need to register for the Non-Union VAT MOSS scheme.

Other VAT changes are being introduced by the EU from 1 July 2021, which will affect UK businesses that either import goods into the EU with a shipment value of less than EUR 150 (for both goods that are being directly sold to the customer (B2C) or through an online market place), as well as those businesses which supply certain services in the EU that currently require a VAT registration in that country (eg land services or performance related services, such as those provided by a singer). The new procedures will not change the place of supply rules for services, only the way that VAT is declared and paid to the tax authorities.

If any of these changes are likely to affect your business, and you need help in transitioning to the new rules, please get in touch.

Noel Guilford