VAT “Mini One Stop Shop” (MOSS) for digital services to consumers in the EU

Has/Is your business supplied/supplying digital services to consumers in the EU?


There is a very important change in the VAT place of supply rules for businesses supplying digital services to consumers (B2C). From 01 January 2015, the place of supply for digital services will be where the customer belongs, instead of the current rule (where the supplier belongs). Digital services include telecoms, satellite TV, the downloading of computer software, music, books and manuals.


From 1 January 2015 there are new place of supply rules for value added tax (VAT) on the supply of digital services by businesses to consumers in the EU.

As a UK trader, you will need to identify where in the EU your non-business customer is located and apply the VAT rate for that country, instead of UK VAT. The customer’s location will be where the consumer is established, has their permanent address or usually resides. 

The VAT Mini One Stop Shop (MOSS) has been introduced to save these businesses from having to register for VAT in every EU Member State in which they supply their services.

Businesses can now register for the online service from 20 October 2014. Registration for the service has to be carried out by the business itself. Once registered, you can authorise us as your agent to act on your behalf for VAT MOSS.

To know more details, Register for and use the VAT Mini One Stop Shop, check these links below https://www.gov.uk/register-and-use-the-vat-mini-one-stop-shop
https://www.gov.uk/vat-on-digital-services-in-the-eu

If you have any queries, post them as comments below.

Contact us to know more on these changes and what changes you need to make to your small business!

 

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HMRC Credit Card Sales Campaign

HMRC's latest disclosure campaign is aimed at traders who accept payments by debit and credit cards but who haven’t declared all transactions. The Credit Card Sales campaign provides an opportunity for individuals and companies accepting debit and credit cards (but have not reflected all transactions in their tax return) to bring their affairs up to date in a simple, straightforward way and take advantage of the best possible terms.



You can use this if:

• you accept card payments for goods or service
• you haven’t declared all your UK tax liabilities

Traders wishing to use the scheme must first notify HMRC. They will then have 4 months from the date they receive HMRC's acknowledgement of notification to make a disclosure and pay any tax due. If, however, you do not come forward and HMRC finds later that you are behind with your tax, it may be harder to convince them that it was not a deliberate act. The law allows HMRC to go back up to 20 years and in serious cases HMRC may carry out a criminal investigation.

HMRC is targeting tax evasion through Debit and Credit Card Sales and will use information it holds on its digital intelligence systems to identify taxpayers who might not have declared all their income. Where additional taxes are due, HMRC will usually charge higher penalties than those available under the Credit Card Sales campaign.

For more information and source https://www.gov.uk/creditcardsales

Please contact us if you have more questions or need expert Tax assistance!

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New Tax Relief For Investment In Social Enterprise!

HMRC's Social Investment Tax Relief scheme (SITR) introduced this year helps individuals support social enterprises, giving these enterprises access to new sources of finance.

SITR helps social enterprises raise finance by offering tax relief to individual investors.

The new relief provides the investor with a deduction from their tax liability, equal to 30% of the amount invested. A £10,000 loan to a qualifying social enterprise would therefore allow an individual to reduce his income tax liability by £3,000.

The relief is available for qualifying investments made on or after 6 April 2014. A social enterprise is a commercial business that helps people or communities. It may be a charity or community interest company.

The social enterprise can make sure they (and the proposed investments) qualify by sending an advance assurance application to HMRC.

Resources about SITR from HMRC:

Guidance for social enterprises
Eligibility and the conditions social enterprises must meet so investors can claim SITR

Guidance for investors
Conditions investors must meet before claiming SITR

Get approval if you're a social enterprise
What social enterprises need to do to get approval from HMRC

How to claim tax relief if you're an investor
What investors need to do and when to claim SITR

Form: SITR Compliance Statement
Social enterprises must use this form to request authority to issue Compliance Certificates to investors

Policy on Social Investment Tax Relief (Opens new window)
How SITR will help grow the social investment market

Post your questions on SITR or other Tax Relief options and we'll help you.

No Loss Relief For Non-Commercial Business!

A recent case before the Tax Tribunal reminds us that HMRC has set that in order to set a trading loss sideways against other income, the business must be commercial one with the intention to make profit against general income.

The case in question relates to Ms Thorne, who ran an equestrian business and another business growing asparagus.  HMRC has disputes on whether the trade had been carried out on a commercial basis with a view to the realisation of profits.  The self-employment pages of her tax return showed a single composite business, which incurred an overall trading loss. The equestrian business was unlikely to make a profit and was clearly a hobby. However, the asparagus business was in its early stages; it is widely accepted that it can take up to three years before a significant crop is produced. Had separate accounts been prepared for the asparagus business, loss relief would likely have been available, as it could be argued that the venture was being carried out on a commercial basis with a view to making a profit.

Check this Working sheet from HMRC Losses HelpSheet

If your business makes losses in the first few years, we can help to ensure the availability of relief by helping you prepare forecasts and a business plan, demonstrating that the business is being carried out on a commercial basis with a view to making a profit.

If you have made a loss in your business/trade or are entitled to a share of the loss made by a partnership of which you are a member, check this HMRC Losses HelpSheet for more details

Collection Of Unpaid Tax Through Your Tax Code!

Currently, HM Revenue & Customs can collect tax debts of up to £3,000 by adjusting your Pay As You Earn (PAYE) tax code. HMRC refers to this as ‘coding out’. The effect of this is to recover the debt from your income, by increasing the amount deducted from your income during the tax year.

This applies if you have a debt with HMRC and:
• are an employee paying tax through (PAYE), and/or
• receive a taxable UK-based private pension

HMRC are now increasing the amount of debt that can be recovered through your tax code if your annual earnings are £30,000 or more. To do this, HMRC will apply a sliding scale to your main PAYE income. The maximum amount that can be coded out is being increased to £17,000 (where earnings exceed £90,000 a year).

These changes will only apply to underpaid Self-Assessment and Class 2 National Insurance debts and Tax Credit overpayments. Changes will be reflected in your 2015-16 tax code and we will write to you before we collect any debts through your PAYE code from April 2015.

If your earnings are less than £30,000, there’s no change. Check the table below if your earnings are above £30,000 & its coding out limits from HMRC website:

More information on this at Collecting overdue tax through your tax code: changes to the amount HMRC can collect

Coding out the unpaid 2013/14 tax is only possible if you submitted your paper tax return by 31 October 2014 or file your tax return online by 30 December 2014.

If you have any queries, post them as comments below.

Contact us to know more on these changes and what changes you need to make to your small business!