Brexit is the scheduled withdrawal of the United Kingdom (UK) from the European Union (EU). Following a June 2016 referendum, in which 51.9% voted to leave. The UK government announced the country’s withdrawal in March 2017. Starting a two-year process that was due to conclude with the UK withdrawing on 29 March 2019. As the UK parliament thrice voted against the negotiated withdrawal agreement. That deadline has been extended twice and is currently 31 October 2019. It is not yet confirmed whether the UK will leave the EU or not And if they do. Whether there will be an exit with a deal or without a deal.
The following guidance has been provided by HM Revenue & Customs about changes to MOSS in the UK. The actions you’ll need to take if the UK leaves the EU without a deal on 31 October 2019.
What will change?
If the UK leaves the EU without a deal on 31 October 2019, the UK will no longer be a part of the VAT MOSS service. UK businesses selling digital services. Will no longer be able to use the UK MOSS portal to declare VAT due in the EU Member States.
The £8,818 annual threshold for cross border sales of digital services. Thus, EU consumers will no longer apply. Supplies of digital services to consumers in the EU will become liable for VAT in the consumer’s Member State.
What do I need to do?
If the UK leaves the EU without a deal on 31 October 2019. Then the last return you will be able to submit via the UK MOSS portal is for the period ending December 2019. You should only include sales made between 1 October 2019 and 11 pm on 31 October 2019 on this return. The submission and payment deadline is 20 January 2020. The portal will close at midnight on 14 February 2020.
Any other outstanding MOSS returns or corrections should be made via the UK MOSS portal by 31 October 2019. After this date, you will need to contact the relevant Member State concerned if you need to amend or submit earlier returns.
If you continue to make supplies of digital services to EU consumers after the UK has left the EU. Then you must charge VAT at the rate of the Member State of your customer, the regardless value of the supply, or either:
- register for VAT in each Member State where VAT is due; or
- register for the VAT MOSS non-Union scheme in a Member State of your choosing.
How do I register for the VAT MOSS non-Union scheme?
You can only register for the MOSS non-Union scheme after the UK has left the EU. You need to register within 10 days of the month following your first sale after the UK has left the EU. Otherwise, your registration will take effect from the first day of the quarter after the date you apply to register.
To allow you to register for the non-Union scheme. You will be deregistered from UK MOSS with effect from 1 November 2019. You will still be able to access the system after you have registered. So you can submit and amend your return for the last quarter of 2019 and view previous returns.
You can find further information on registering for the MOSS non-Union scheme. On the EU Commission’s webpage (ec.europa.eu/taxation_customs/business/vat/telecommunications-broadcasting-electronic-services/content/register-moss_en) and information on EU exit on gov.uk at ‘VAT for business if there is no Brexit deal’.
Businesses can register for our email update service atwww.gov.uk/hmrc/business-support. select ‘business help and education emails’, then ‘EU Exit. You can use the ‘Prepare your business for the UK leaving the EU’ tool on GOV.UK. To find further guidance and support to help your business.
If you have any questions in respect of UK MOSS and EU exit, you can email the VAT MOSS team at [email protected].