Recording sales under the VAT Mini One Stop Shop (MOSS) scheme

Summary

How to record sales under the VAT Mini One Stop Shop in Sage Accounting.

Description

This article explains how to record sales under the Non-Union VAT Mini One Stop Shop (MOSS) scheme.

How this works

The VAT Mini One Stop Shop (MOSS) is a way of paying VAT on supplies of digital services to the EU.

BuBusiness-to-consumerB2C) digital services sold to EU consumers are generally subject to VAT charged in that country. A consumer is a customer who is not VAT registered. Under the scheme, you submit one VAT MOSS Return each quarter, instead of registering for VAT and submitting VAT Returns in each EU country you sell to.

To use the MOSS, you need to register for a Non-Union VAT MOSS scheme in an EU member state.

About the Non-Union VAT MOSS scheme

UK businesses must use Non-Union VAT MOSS (for businesses based outside the EU).

You only need to file one Non-Union VAT MOSS return each calendar quarter
HMRC sends the relevant parts of the return and payment to the country's tax authority where the ultimate customers are based

Your business must:

Be based outside the EU
Have no fixed or business establishments in the EU
Supply digital services to customers in the EU

For more details and how to register, check the HMRC website at https://www.gov.uk/guidance/the-vat-rules-if-you-supply-digital-services-to-private-consumers (opens in new window)

What are digital services?

Digital services include, but are not restricted to:

Broadcasting – Services including the supply of television and radio programmes
Telecommunications – Services including fixed and mobile telephony, fax and connection to the internet
E-services – Services that are heavily reliant on the Internet for their execution. For example, video on demand, apps downloads, music downloads, e-books and anti virus software

NOTE: The above list is not exhaustive. It’s important that you understand whether the services that you supply will fall within these rules. For further guidance, please contact HMRC.

The following are not covered by the new rules:

Sales to other businesses (B2B) in the EU
Sales to customers located outside of the EU

Resolution

What you need to do

To record the sales of service to EU consumers in Sage Accounting

Create a ledger account to record your VAT MOSS liability.
Record the sale as a sales invoice.
Check your Moss transactions.
Pay the VAT due under the MOSS scheme.

Create a VAT MOSS liability ledger account

Create a new ledger account to record the VAT charged on your digital services.

You'll need a different ledger account as you report the VAT separately to a normal VAT return.

From Settings, choose Business Settings.
From the Financial Settings section, choose Chart of Accounts.
Select New Ledger Account. Enter the following details:
Ledger name - Enter a name for the account, such as VAT MOSS liability.
Nominal code - Enter a code. If you use our default chart of accounts, we recommend a number between 2100 and 2230, such as 2207.
Category - Select Current Liability.
VAT Rate - Select No VAT.
Visibility - Select Sales – Invoice / Credit, Product / Services / Customer. Leave the other defaults selected.
Click Save.

Record sales under the Non-Union VAT MOSS scheme

Sales under the VAT MOSS scheme are not reported on your normal VAT return. To record the VAT on a sales invoice you must record the sale on two lines

One line for the Net value of the digital services
A second line for the VAT

Both lines have No VAT as the VAT rate to ensure they are not reported on the VAT return.

From Sales, select Sales invoice, then New.
Add the details of the customer and invoice date etc.
Enter the details of the service:
For the Price/Rate, enter the Net amount (excluding VAT).
From Goods/Services, select (Services Standalone).
Change the VAT rate to No VAT.
Enter the details of the VAT:
For the Ledger account, select the new ledger account you have just created.
For the Price/Rate, enter the VAT amount.
From Goods/Services, select (Services Standalone).
Change the VAT rate to No VAT.

Find transactions to include on your VAT MOSS Return

Use the Nominal Activity Report to find details of the transactions to include in your VAT MOSS return.

From Reporting choose More.
From the Detailed Reports section, select Nominal Activity.
For the Period list, choose Custom. Then enter the date range for the relevant VAT quarter in the From and To fields.
Select the VAT MOSS liability account.
To view details of a transaction, select the relevant line. To return to the report, select the back button on your browser menu bar.
To save or print the report select Export Summary or Export Detailed. If all accounts are selected you may need to choose Yes to confirm. You should now choose one of the following file formats:
CSV – Depending on your internet browser, the file automatically downloads to your Downloads folder or you’re prompted to save the file. Browse to where you want to save the file and Save.
PDF – The PDF opens in a new window or tab. Open your browser File menu then choose to print or save the report.

Pay VAT due under the MOSS scheme

When you pay your VAT MOSS bill to HMRC, make sure you record it against the MOSS liability ledger account set up.

This is to make sure that the payment reduces the amount you owe HMRC and ensures your balance sheet is accurate.

From Banking, select the required bank account.
Select New Entry then Purchase / Payment.
Select the Other Payment tab, then enter the date, a reference and the amount.
Also enter the following:
Ledger Account - Choose the MOSS liability ledger account you created.
VAT Rate - choose No VAT.
Select Save.