Brexit - selling digital goods? Reapplied for MOSS VAT return?
- Jan 1, 2021 | Richard Asquith
Since 1 January 2021, the end of the UK Brexit transition period, if you are an UK, EU or US seller of digital services, then you will need new VAT registrations to avoid being fined by the tax authorities. This includes cross-border sales to UK and EU consumers of: downloadable or streaming media; app’s; online software; e-learning; e-books; online journals; and dating or similar membership websites.
Avalara can help register you anywhere in the EU, UK or the rest of the world for digital or electronic services. Check Avalara's global VAT on digital services tracker.
What changed for UK and EU digital services providers?
The UK left the EU VAT regime on 31 December 2020 at the end of its Brexit transition period. Here’s what that means for providers of electronic (digital), telecommunications and broadcast providers:
| Type of seller | What changed 31 Dec 2020? | Action to avoid fines and interest |
| UK sellers | You can no longer use the Mini-One-Stop shop (MOSS) single VAT return with HMRC to report sales to EU consumers and pay over EU VAT. | Apply now in any EU member state for a MOSS registration number. You will be able to use this to report quarterly sales to EU27 states under the non-Union MOSS scheme. You must have completed this in time for January reporting |
| EU sellers | You are unable to report sales to UK consumers through your MOSS return. | You should apply now for a regular UK VAT number to report on a quarterly basis any sales to UK customers. Remember – there is no threshold for this. All UK sales must be immediately reported to the UK’s HMRC. |
| US sellers | If you are registered in the UK for your pan-EU electronic services, you can no longer be able to use that for EU or UK transaction reporting. | You will need a new EU MOSS registration. For the UK, you will need a new UK VAT registration, too. |
Do not delay on these VAT applications! Remember, all other ecommerce sellers will be urgently applying too, creating a major backlog for tax authorities already stretched with COVID-19.
Did digital services VAT rates change after 31 December’s Brexit?
No. Whether selling to a UK or EU customer, you must still charge the VAT rate of their country of residency. This can be reported in the UK VAT or EU MOSS return.
Need help with your UK VAT compliance?
Researching UK VAT legislation is the first step to understanding your VAT compliance needs. Avalara has a range of solutions that can help your business depending on where and how you trade.
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