1 January 2015 will herald the introduction of a major VAT change for businesses which supply digital content to non-business customers (‘B2C’) sales.
The change will affect the ‘retail’ sale of apps, games, music, books etc where these are delivered electronically.
From 1 January 2015 EU suppliers selling these services to EU customers will need to account for VAT (and at the prevailing rate applicable) in the customer’s EU member state.
UK suppliers will either have to do this by registering for VAT in each EU member state where they have customers or, by using the “Mini-One-Stop-Shop” online registration facility provided by HMRC.
There are pros and cons to both approaches.
There are also significant commercial and systems issues to be addressed here.
If you are affected by this change but have not taken action to deal with the registration requirements post-1 January, we would urge you to do so as a matter of urgency.
We are currently helping other clients through the process and have been working closely with UKTI to educate businesses operating in this sector.
Do get in touch if you need to know more – firstname.lastname@example.org.