I no longer keep this site up to date. It remains here for archival purposes, but please seek out more current information on the subject.
On the 1st of January 2015, the VAT place of supply rules changed. This has huge consequences to all businesses that sell digital products to other countries within the EC. In October 2014 it dawned on me how horrible these new rules were. I found barely anyone talking about them so I wrote up what I feared in a blog post.
I have also written in in a FAQ Format the basics of what small business and freelancers need to know.
It turns out to be quite tricky to ascertain what the new rules mean for an individual situation. Many of the microbusinesses and freelancers caught up in the change won't have an accountant as their tax affairs were simple until now. While we can't give advice to each other in an official capacity, can we share what we know and what we have been told and try to help each other make sense of these rules.
- links to official documentation and other resources
- how are you implementing the new rules in your business?
- Software solutions
- we are seeing more third parties detailing their solutions, find links and information here
- Questions that have answers
- Need Answers
- Scenarios where the existing guidance is unclear or not suited to the reality of microbusinesses selling online
See the response and clarification. There is some good news with regard to evidence collection for small businesses who use a payment processor. However nothing has changed in regard to very small businesses still needing to comply with proof. For evidence of just how crazy the guidance is from HMRC take a look at the table describing what constitutes a digital service.
EU VAT Action is a site put together by a group representing the very small nano-businesses who are being dragged into this.
A Webinar was held with solution provider Taxamo and HMRC. In this seminar some issues regarding separating out the EU sales from UK sales were discussed. View the Webinar or read Clare Josa's excellent transcript. Unfortunately this webinar failed to address the issues of proof gathering, despite being held by Taxamo, a third party service for compliance with the new rules who must have implemented something. HMRC has stated they will post additional guidance soon.
A group met with HMRC on Thursday 4th December at the offices of Enterprise Nation. Read a write-up from attendees.
This site was put together in an attempt to spread awareness of the new VAT rules among freelancers and microbusinesses who might not realise the implications. Nothing here constitutes official advice.