UK modifies VAT Act for 2015 digital services changes

Thu 16th Oct 2014

The UK VAT authorities this week issued the new regulations to modify the VAT Act for the changes in the 2015 place of supply for B2C digital services.

As with all the 28 member states of the European Union, in the UK from 1 January 2015, providers of digital services will no longer charge EU consumers their local VAT rates, but instead have to charge the VAT rate of the consumers’ countries. This will require the providers to identify the location of the residence of the consumers.

The digital services affected include: e-services; broadcasting; and telecoms.

In addition to these UK changes, a new online portal, Mini One Stop Shop, is being opened. This will enable UK resident providers to file quarterly returns showing VAT charged in other member states, and make a single payment which is then redistributed to the relevant countries. Non-EU companies may register in the UK MOSS too.

The UK changes are based upon changes made to the EU VAT Directive by Council Directive (2006/112) in February 2008.