Updates on VAT MOSS and businesses which are alcohol wholesalers.
The place of supply of digital services – otherwise known as broadcasting, telecommunications and electronic services (BTE) – has moved to where the customer is based from 1 January 2015. This has been a well publicised change and due to the administrative burden of potential of requiring multiple VAT registrations in up to a potential 28 European Union member states, the VAT Mini One Stop Shop (VAT MOSS) was introduced.
The VAT MOSS is a system available to registration for all businesses that fall within this regime, without which businesses supplying digital services may be obliged to register in the most extreme circumstances in all 28 EU member states.
The first VAT MOSS return for those registered will be for the period 1 January to 31 March 2015; the return will be able to be completed from 1 April 2015. The VAT MOSS return will need to be filed and paid by 20 April 2015.
Until 30 June 2015 HMRC is offering help to microbusinesses (those trading below the VAT registration threshold, currently £81,000) that are registering for VAT MOSS. It is allowing microbusinesses to base their customer location, VAT taxation and accounting decisions on information provided to them by their payment service provider. This means the business need not require further information to be supplied by the customer for this transitional period and will give microbusinesses time to adapt their websites to meet the new data collection requirements.
For further details please view ACCA’s Guide to VAT MOSS.
In order to combat alcohol fraud HMRC has proposed the introduction of the Alcohol Wholesaler Registration Scheme (AWRS). Businesses that wholesale alcoholic drinks will need to apply to register under the AWRS from 1 October and 31 December 2015. The objective is to combat fraud and protect legitimate wholesale alcohol traders against unfair competition from illicit traders.
There are 20,000 wholesale alcohol traders in the UK and between 6 April 2013 and 5 April 2014 HMRC through its ‘tackling alcohol fraud’ initiative protected revenues of over £680m, therefore this is a significant issue.
Any wholesale alcohol businesses not registered in this period run the risk of trading illegally. During this registration period HMRC will assess whether businesses should be registered by looking for businesses that demonstrate their business is sufficiently protected from illicit alcohol trade, in other words that they are ‘fit and proper’. If HMRC discovers evidence of fraud it may lead to the right to trade alcohol to be removed.
It is also proposed from April 2017 it will become an offence for a retailer to purchase alcohol from an unregistered alcohol wholesaler.
Further details are available in VAT Notes 2014 Issue 4.