So am I the only person who isn’t surprized that the MOSS system seems to be a bit of a disaster? Remember that this is the scheme where you’re supposed to register for VAT if you make ANY B2C sales of e-services to customers in other EU countries. This time last year, the internet was full of articles and information telling such businesses that they had to register for the MOSS scheme. Estimates suggested that there should be thousands of registrations in the UK alone. So it really seems as though it’s all a bit of a MOSS trainwreck
In June, it was reported that there were ONLY 2,020 MOSS registration across the whole of the EU, of which over 50% are in the UK and Germany. The estimate is apparently 3,500 by the end of the year (which includes additional registrations from non-EU businesses making B2C sales to EU customers, which has its own scheme).
Am I the only person who thinks this is a bizarrely LOW figure?
So if we assume that 50% of the combined UK/German figure are based in the UK, that means there are about 500 UK VAT MOSS registrations by June. IS THAT ALL? WHERE ARE THE REST?
And what about other EU countries? On these figures, that makes an average of about 30 registration per country.
Now we know that the introduction of the system in the UK was not handled in the smoothest manner, with a lot of confusion about whether UK businesses whose UK turnover is below the UK registration limit are required to register for MOSS. And I can’t help thinking that there must still be thousands of micro-businesses making these sales who have no idea that they should register for MOSS.
Apparently, EU ministers are considering whether there should be an exemption of some sorts for small businesses. That would, of course, be a good thing for both those micro-businesses selling small values of products AND would remove what must be the most ineffective costs of administration for national tax authorities,
But I think this misses the most fundamental factor about the scheme.
JUST HOW DO YOU POLICE A SYSTEM WHICH IS DONE SOLELY ONLINE WITH BY THOUSANDS OF INDIVIDUAL VENDORS THROUGHOUT THE EU?
Just think about it – how can the tax authorities do this? Even just counting how many EU vendors are involved in such business is impossible, changing every day, if not every hour or minute. Plus the customers aren’t likely to report if they’re not charged VAT on their purchases.
I know that one of the main reasons the system was introduced was to prevent large B2C retailers of e-services saving VAT by selling under the old system where the VAT liability was based on the country in which they are established. But the knock-on effect for small and micro-businesses seems to make a mockery of the whole system. And once again the UK and Germany are probably the only two countries who have implemented the scheme with any real effort.
Let’s wait and see what happens next. I’m guessing the introduction of exemption for small businesses. Let’s hope some common sense prevails.
In the meantime, let me know what you think about this whole palava. Have you registered for VAT or have any of your clients registered under the MOSS scheme? If you haven’ t registered and you should, why not?
Red and black!
Hope you’ve noticed our new look! Actually changing website themes (i.e. how it looks) isn’t particularly difficult and I’ve been wanting to do it for a long, long time. What’s difficult, though, is that every “theme” functions a bit differently, so you have to spend some time behind the scenes moving content around and working out why you’ve lost certain content, so we’re still working out the kinks. But I’m just happy that the site looks a lot crisper and cleaner with the red and black colour scheme and less like a contents page from a Grammar school textbook.
We’ll be adding a few new sections over the next few weeks, but in the meantime it’s business as usual. Contact me marie@vatexchange.co.uk if you need help with any VAT issue.
Marie
September, 2015