I’ve had a couple of queries recently from UK businesses registered under the MOSS arrangements about UK VAT returns, so I thought it was a good time to try to explain the rules for MOSS businesses and UK VAT returns.
There seems to be a lot of confusion among MOSS businesses whose turnover is below the VAT registration limit. In some cases, they have submitted and paid their MOSS VAT returns but haven’t submitted a UK VAT return. And because they haven’t submitted a UK VAT return, they have received an automatic VAT assessment from HMRC for UK VAT.
I know that there was a lot of confusion for UK businesses who weren’t registered for VAT because their turnover is below the registration limit when the new MOSS VAT rules came in this year. Many assumed that they didn’t have to register to pay VAT in other EU countries if they weren’t liable to register in the UK; or assumed that they could register for MOSS to pay VAT in other EU countries without being registered for VAT in the UK.
Now having got the teething problems with the registration arrangements over, people are now confused about the VAT returns.
This is how it works: If you are registered for MOSS but your UK turnover is below the UK registration limit, you don’t have to pay UK VAT on your UK sales. However you MUST submit a “NIL” UK VAT return each quarter, otherwise HMRC will issue a VAT assessment.
The only way to get rid of the assessment is to submit the VAT return.
There is more information about VAT returns for MOSS businesses whose turnover is below the UK VAT registration threshold on HMRC’s website here.
If you’re unsure how to submit a VAT return, you can find information on HMRC’s website here.
MOSS sales and EC sales lists
The other common area of confusion is whether MOSS business are required to declare their MOSS sales on EC sales lists. The answer is NO.
Only UK businesses selling goods or services to VAT registered customers in other EU countries are required to submit EC sales lists. The value of these sales (and any purchases from VAT registered businesses in other EU countries) is declared in boxes 8 and 9 of the UK VAT return and HMRC will automatically issue EC sales lists to the businesses. However some MOSS businesses seem to have included their MOSS sales in box 8 of the return by mistake and don’t understand why they’re now being asked to submit EC sales lists.
If you’ve included your MOSS sales in box 8 of our UK VAT return by mistake, you’ll have to ask HMRC to amend the return by contacting the VAT Error Correction Team, as explained in VAT Notice 700/45: how to correct VAT errors and make adjustments and claims; section 4.11 http://tinyurl.com/qzr2ns5.
I hope this has helped clarify things, but if you’re still confused, it’s probably best to contact HMRC’s VAT helpline on 0300 200 3700 and talk it through with an officer.
Marie
July, 2015