NOTE: We're unable to advise on whether specific scenarios or transactions are to be included on a VAT MOSS Return. For further guidance, please contact HMRC or Revenue. HMRC have also published the following guides:
VAT Mini One Stop Shop: Union Return
VAT Mini One Stop Shop: Union Return guides
VAT Mini One Stop Shop: Non-Union Return
VAT Mini One Stop Shop: Non-Union Return guides
The new VAT rules
The new VAT rules came into effect on 1 January 2015.
Under the new rules, when you sell digital services to consumers in other EU countries, the VAT is charged in the country where the customer is based. For example, if your business sells a new app for a smartphone or tablet to a private individual based in Italy, you must charge the Italian VAT rate, currently 22%, instead of the UK rate of 20%.
Your business must either register for VAT and submit VAT Returns in each EU country you sell to, or alternatively, register for the VAT Mini One Stop Shop (MOSS) scheme provided by HMRC and Revenue.
What are digital services?
Digital services include, but aren't restricted to:
The supply of television and radio programs.
Includes fixed and mobile telephony, fax and connection to the Internet.
These are services that are heavily reliant on the Internet for their execution. For example, video on demand, apps downloads, music downloads, e-books and antivirus software.
The above list isn't exhaustive. It's important that you understand whether the supplies that you make will fall within these new rules. For further guidance, please contact HMRC or Revenue. UK businesses can also refer to the HMRC quick guide at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/390300/VAT_MOSS_Flow_chart.pdf
Out of the scope of MOSS
The following aren't covered by the new rules relating to MOSS:
- Sales to other businesses (B2B) in the EU.
- Sales to customers located outside of the EU.
The VAT Mini One Stop Shop
VAT Mini One Stop Shop (MOSS) is a scheme provided by HMRC and Revenue to help businesses who sell digital services to non-business customers in other EU countries. You can register for this scheme and submit one VAT MOSS Return each quarter, instead of registering for VAT and submitting VAT Returns in each EU country you sell to. You can find details of the VAT MOSS scheme and how to register on the gov.uk website at https://www.gov.uk/register-and-use-the-vat-mini-one-stop-shop and on the Revenue website at http://www.revenue.ie/en/tax/vat/moss/index.html
To use the VAT MOSS online service to account for VAT on digital services, you must:
- Register for the VAT MOSS scheme with HMRC or Revenue.
- Submit an online quarterly VAT MOSS Return to HMRC or Revenue detailing the VAT due in each country.
- Pay your VAT MOSS bill when you submit your return or before the due date of the return.
How VAT MOSS works in Sage Accounts
You can't submit a VAT MOSS Return directly from Sage Accounts. However you can:
- Process transactions using the VAT rate for the EU country where your customers are based. To do this, you need to set up new tax codes for each country.
- Identify the values to manually add to your VAT MOSS Return. To do this, you can download and run the Tax Analysis - Sales of EU digital services report.
For further details, please refer to the Steps tab.
To set up new tax codes to use under the VAT MOSS scheme
To identify the transactions you need to include on your VAT MOSS Return, you must set up a new tax code for each EU country where you sell digital services.
- Settings > Configuration > Tax Codes.
- Select the first unused tax code, for example, T10 > Edit.
- Complete the Edit Tax Code window as follows:
Rate Enter the VAT rate for the EU country.
NOTE: If you use different rates in a country, for example, standard rate and reduced rate, you must set up a different tax code for each rate.
Include in VAT return Ensure this check box is clear.
NOTE: Because you don't select this check box, when you check your data the warning 'Transaction uses tax code which is not included in the VAT return' is generate for transactions you post with this tax code. This is expected, please ignore these warnings.
Reverse Charge Ensure this check box is clear. Enable EC Code Ensure this check box is clear. Description Enter a description for the tax code, for example, German standard VAT rate.
- Repeat steps 2 to 4 for each EU country VAT rate you need to use.
- Apply > Close.
You've now set up your new tax codes. You should use these when you enter EU sales which fall under the VAT MOSS scheme. This ensures these sales are excluded from your normal VAT Return and means they're picked up on the Tax Analysis - Sales of EU digital services report.
To help you complete your quarterly VAT MOSS Return, you must download and install the Tax Analysis - Sales of EU digital services report. for more information, please refer to the following sections.
To download the Tax Analysis - Sales of EU digital services report
- Access the My Sage website: https://my.sage.co.uk/downloads/default.aspx
- Choose Sage 50 Accounts or Sage Instant Accounts as required > Updates.
- Locate the the relevant download as follows:
TIP: If you can't see the download for your version of Sage Accounts, click Other versions on the right-hand side. Alternatively, if you're viewing this article online, you can click the relevant download link in the table below.
Version of Sage Accounts Download to use
- Sage 50 Accounts v21 and above
- Sage 50 Accounts 2014 (v20) or Sage Instant Accounts 2014 (v20)
Sage Accounts 2014 and above - VAT MOSS Report
- Sage 50 Accounts 2013 (v19) or Sage Instant Accounts 2013 (v19)
Sage Accounts 2013 - VAT MOSS Report
- Sage 50 Accounts 2012 (v18) or Sage Instant Accounts 2012 (v18)
- Sage 50 Accounts 2011 (v17) or Sage Instant Accounts 2011 (v17)
- Sage 50 Accounts 2010 (v16) or Sage Instant Accounts v16
Sage Accounts 2010 - 2012 - VAT MOSS Report
TIP: You can check your software version in Sage Accounts in Help > About.
- Download > when prompted to run or save the file, make a note of the filename, for example, Sale of EU digital services V20.001 > to save the file to your computer, click Save.
- If a Save As window appears, browse to and select the required destination, for example, your Windows desktop > Save.
You've now successfully downloaded the Tax Analysis - Sales of EU digital services report backup. For details of how to restore this, please refer to the following section.
To install the Tax Analysis - Sales of EU digital services report
- File > Backup > take a backup of your data. For more information, please refer to article .
- File > Restore > Browse > browse to and select the file you downloaded in the previous section > Open.
- Backup details > check that the Company Name shows Sales of EU digital services > OK > Yes.
NOTE: Although the confirmation message advises that data will be overwritten, the backup contains only report and image files and therefore doesn't affect your data.
- OK > if prompted, enter your logon details > OK.
You've now installed the Tax Analysis - Sales of EU digital services report. You can run this report to see the information you need to complete your quarterly VAT MOSS Return. For more information, please refer to the following section.
To run the Tax Analysis - Sales of EU digital services report
- VAT > Reports > Tax analysis.
Sage Accounts 2014 (v20) and below - Company > Tasks pane > Manage VAT > Reports > Tax Analysis reports.
- Select Tax Analysis - Sales of EU digital services > Preview.
- Enter the date range for the relevant VAT MOSS quarter > OK.
NOTE: If you don't want to include deleted transactions, ensure you select the Exclude Deleted Tran check box.
This report details the EU sales transactions to help you complete your VAT MOSS Return. Once you've submitted your VAT MOSS Return and you're ready to pay your VAT bill, please refer to the following section.
To make your VAT payment to HMRC or Revenue
When you're ready to make your VAT MOSS payment to HMRC or Revenue, you must transfer the balance from the sales tax control account to your VAT liability nominal code. You can then post a bank payment to clear the VAT liability balance.
To transfer the VAT amount to your VAT liability nominal code
- Nominal codes > Journal entry.
Sage Accounts 2013 (v19) and 2014 (v20) - Company > Tasks pane > Journal Entry.
Sage Accounts 2012 (v18) and below - Company > Tasks pane > New Journal.
- Enter a reference and date for the journal, then enter the following information:
N/C Name Details T/C Debit Credit 2200 Sales Tax Control Account VAT MOSS liability T9 VAT liability amount 2202 VAT Liability VAT MOSS liability T9 VAT liability amount
- Save > Close.
To post your VAT liability bank payment
- Bank accounts > Payments > Bank payment.
Sage 50 Accounts 2014 (v21) and below - Bank > Payment.
- Complete the Bank Payments window as required, for example:
Bank Date Ref N/C Details Net T/C VAT 1200 Date of payment VAT 2202 HMRC or Revenue VAT payment VAT liability amount T9 0.00
- Save > Close.
You've now posted your VAT MOSS payment for the quarter and reduced the sales tax control account balance by the amount you paid.