UPDATE: Additional Guidance for Micro Businesses on VAT MOSS Scheme

Brief 46/2014

HMRC has issued a new Business Brief outlining additional guidance for small businesses that trade below the VAT registration threshold.  The Brief confirms that small businesses registering for the MOSS scheme will need to apply for a UK VAT registration and complete quarterly VAT returns. If UK sales remain below the UK VAT threshold (currently £81,000), they will be able to submit a zero VAT return.

In addition, affected business will be entitled to a refund of VAT incurred on expenditure related to EU sales.

Read the full Brief 46/2014 here.

This is a welcome move and it was initially announced by HMRC during a seminar in which Chiene + Tait participated in last month. However, the MOSS changes are drawing increasing criticism from smaller businesses as they have to register for UK VAT to use the MOSS scheme as well dealing with the significant compliance burdens that the MOSS scheme places on them.

The UK Government has indicated that this is an EU wide change and that any change in scope would have to be done via agreement from all Member States of the EU.

If you consider that this might be relevant to your business or organisation and would like to discuss this in more detail, please do not hesitate to contact our Senior VAT Manager Iain Masterton for further information on 0131 558 5800 or email iain.masterton@chiene.co.uk.