What is VAT Moss?

Are you selling digital downloads or online services? If you sell to the EU you need to register for VAT moss to ensure you remain within the EU law.
what is VAT moss

If you are selling digital downloads or online services, and you sell to EU countries, you are likely to have to register for VAT moss even if you do not meet the UK VAT threshold, so what is VAT moss?

So what is VAT MOSS?

VAT MOSS stands for Value Added Tax Mini One Stop Shop. VAT (value added tax) is a normal requirement for businesses when they sell domestically. Normally, business must meet a threshold of sales to be required to register and charge VAT. Therefore, if you sell under £85,000 in the UK you need not register for VAT and will not have to charge VAT. 

It will surprise the vast majority of businesses who sell and deliver online to hear that they need to register for VAT MOSS Mini One Stop Shop regardless of turnover.

  • Digital Guides
  • PDF
  • Audiobooks
  • Digital Courses
  • Games which are delivered by Download
  • Logos electronically
  • Schematics
  • Videos delivered by download
  • Online delivered projects
  • and the list keeps growing

Introduced in 2015, this scheme aims to simplify VAT when selling in the EU, the alternative would be registering for VAT in each individual country. It means that you only have to pay VAT to HMRC and not the individual EU countries. 

This is aimed specifically at those who sell business to consumer. Therefore if someone in Germany buys your product you need to send a return to HMRC stating how much VAT you should have charged. You would then pay HMRC the money so they can send it to the German tax authorities.

Thresholds for VAT MOSS

You must register for VAT moss if you meet the following criteria:

  • The digital supplies threshold is £8,818
  • Business to consumer
  • Not a Hobby/interest business – see here
  • Deliver digitally

How to register for VAT MOSS?

To register for VAT MOSS you need to be VAT registered in the UK.  After you have registered for VAT you need to register for VAT moss. 

Register for VAT here

Register for VAT moss here

If you are below the threshold for UK VAT then you will need to submit Nil VAT returns quarterly. You will also not be required to register for Making Tax Digital if you are below the threshold.

How do I pay VAT moss?

You will have to submit four VAT MOSS returns a year and these are set dates:

  • 20 April for the quarter ending 31 March
  • 20 July for the quarter ending 30 June
  • 20 October for the quarter ending 30 September
  • 20 January for the quarter ending 31 December

You need to supply a list of sales including information on VAT rate and country consumer purchased from.  HMRC have provided a template for submissions and this can be found here.

The information is simple but you need to ensure that you capture the relevant information when selling digital items. Specialist providers like SendOwl, EasyDigital Downloads, Shopify and Sellfly should have downloadable reports for you to use.

Once you have completed your VAT moss return you will need to pay on the same day as the deadline for the returns themselves. It is always best practice to pay HMRC once you submit the return.

Can I reclaim VAT with VAT moss?

If you do not pay VAT on your UK sales then you cannot reclaim VAT on purchases made for these items. However, if you purchase items and sell to EU countries you can claim VAT. Instead of doing a nil VAT return you will have to enter purchase VAT incurred so you can reclaim. This is not done on the VAT moss return itself.

Take a look at this post: Top 8 Making Tax Digital for VAT Software Solutions

Need more Help?

If you have any questions about VAT moss, please reach out to us. We are experts at e-commerce and digital businesses.

Find out the hidden danger of reverse charge VAT and Facebook and Google Ads spend

Sell on Amazon? Take a look at our guide for VAT for Amazon sellers.

Free 30 Minute Consultation

Why not grab a Free 30 Minute Consultation with Ben, he can answer any questions you have about your e-commerce or marketplace business, guide you on tax efficiency and see if we can help you.

You Have Nothing to Lose & A Lot to Gain
Ben Sztejka ACA

Ben Sztejka ACA

We are a leading e-commerce accounting firm, focused on assisting UK and EU businesses in thriving online. With expertise in Amazon FBA, Shopify, Etsy, and eBay, we provide customised tax compliance and reporting solutions. Our team combines 10 years of experience as ICAEW chartered accountants with 15 years in e-commerce, offering unparalleled support to both e-commerce businesses and accountants.

Ben Sztejka ACA

Ben Sztejka ACA

Head Accountant & Director here at Your Ecommerce Accountant. Specialises in Ecommerce Accounting drawn from his own experience in Ecommerce and selling on marketplaces like eBay, Amazon & ETSY.

Why Not Book A Free 30-Minute Chat with Ben & Ask Any Questions You May Have...

Recent posts

Read More
Ben was incredibly friendly, helpful and honest, and produced the accounts very quickly and at a fair price. He dealt with all the submissions and paperwork for me included in the price.
Read More
Ben and the team and really helpful & knowledgeable. The thought of doing our own accounts is headache educing. Accounts is a part of our business we don't have to worry about and we trust the team to take care of things. Furthermore, they really understand ecommerce accounting and the nuances it involves -do not go to a traditional accountant if you sell online.
Read More
Ben was very prompt with his consultation call, and very friendly. He explained what needs to happem first, and was honest enough to let me know that he won't be needed until the business is up and running and making money. I look forward to working with Ben and his team in the future!
Read More
I had a free consultation and it was so so helpful. The advice was simplified and I came away feeling really sure of what I needed and didn’t need to do in what seems like a minefield. I could not recommend enough! Thank you so much!

Get Really Useful Emails From Us Every Few Weeks...