Last week I wrote about a government "concession" wrt an EU VAT rule that will come into force 1 January 2015, regarding VAT registration requirements for firms selling digital services:
"HMRC conceded that while micro companies are still obliged to register for VAT in the UK to use MOSS, they will no longer be forced to charge UK VAT on their domestic sales."All very well and "flexible" of HMRC and the government, maybe.
However, I also noted:
"The thorny question of proving online where someone actually resides is of course another matter!"Fear not, HMRC have covered that and (of course) have made things a lot more complicated for the hapless SME's selling digital services.
As per HMRC:
"When you provide digital services in the circumstances below, you can presume that the location of your consumer is as specified below. If the service is supplied:All clear?
Where one of the presumptions apply, you’re only required to retain evidence showing the relevant place (for example, the place where the decoder is installed).
- through a telephone box, a telephone kiosk, a wi-fi hot spot, an internet café, a restaurant or a hotel lobby, the consumer location will be the place where the services are provided - for example, the member state where the phone box/kiosk etc is located
- on board transport travelling between different countries in the EU (for example, by boat or train), the consumer location will be the place of departure for the consumer’s journey
- through an individual consumer’s telephone landline, the consumer location will be the place where the landline is located
- through a mobile phone, the consumer location will be the country code of the SIM card
- through a decoder, the consumer location will be the postal address where the decoder is sent or installed
However, if you choose to, you may rebut the presumption using alternative evidence. To support this decision you’ll need to collect and to keep 3 pieces of non-contradictory commercial evidence. If you’re providing digital services in circumstances not listed above, you’ll need to support your decision about the consumer’s location by providing 2 pieces of non-contradictory commercial evidence."
Tax does have to be taxing.
Professional Cover Against the Threat of Costly TAX and VAT Investigations
Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.
Ken Frost has negotiated a 10% discount on any polices that may suit your needs.
However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.
What is Solar Tax Investigation Insurance?
Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.
To find out more, please use this link Solar Tax Investigation Insurance
HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"