Brexit FAQ
From 1 January 2021, for UK businesses supplying digital services to non-business customers in the EU, the ‘place of supply’ continues to be where the customer resides. VAT on those services is due in the EU member state in which the customer resides. The £8,818 annual threshold for cross borders sales of digital services to EU consumers no longer applies.
Businesses will have to charge VAT at the rate where the customer is based and declare those sales to the relevant EU member state.
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. You must register for the VAT MOSS non-union scheme in an EU member state. For businesses wanting to continue using MOSS, they must register for the scheme by the 10th day of the month following their first sale after the UK leaves the EU. For example, register by 10 February 2021 if a sale is made in January 2021.
UK businesses were only be able to register after 31 December 2020.
Alternatively, businesses can register in each EU Member State where they make sales.
The sale of B2B digital services will continue to follow the standard sale of B2B service regulations.
