SMEs Encouraged To Register For New Tax Service Now

Registration Will Be Open Soon For A New HMRC Online Service


Steven Beahan, Partner | +44 (0)114 294 7868

Small to medium-sized enterprises (SMEs) have been encouraged to register now in order to be able to use a new online VAT system being rolled out in January 2015.

As of next year, any company that supplies digital services across the European Union will be able to use the VAT Mini One Stop Shop (VAT MOSS) service from HM Revenue & Customs, which means they will not have to register their VAT separately in every country where they do business.

This includes those involved with telecommunications, app development, broadcasting and much more, with the government estimating that thousands of firms could be affected.

The alterations are in line with new legislation that states the place of taxation will be where the consumer lives, not where the supplier is established.

Furthermore, VAT MOSS is to be adopted by all member states in Europe to reduce the administrative burdens that arise when firms have to register for VAT everywhere they have consumers.

"Businesses with their main operation or headquarters in the UK will register with HMRC to use the service," explained deputy director of indirect tax at the organisation Sally Beggs.

However, although these changes do not come into effect until January next year, HMRC has pointed out that businesses are able to register for VAT MOSS from October 20th 2014.

Therefore, it could be a good idea for organisations to take action now, rather than waiting until the busy Christmas period when such things might be pushed back or even forgotten.

HMRC anticipates that between 27,000 and 42,000 UK businesses will register for VAT MOSS in the UK over the coming weeks.

Also on the topic of tax, SMEs in the manufacturing and software development sectors have been urged to check whether or not they are eligible for research and development tax credits, after the government found that less than five per cent of companies that could qualify for them may be currently claiming such funds.

Expert Opinion
This is a useful initiative and tool which should go some way to helping small businesses with international ambitions to ensure they are complying with their VAT responsibilities.

"Developing an offering in terms of exporting or operations abroad can be a complex process, so something like the VAT MOSS is one step towards simplifying one key aspect of such plans.

"We would urge any SMEs which could benefit from this to take advantage of it and also to carefully consider all of the key areas they may need advice and support on. They should also consider how they may be able to benefit from tailored legal guidance on the key compliance issues they need to address when looking to expand their services in overseas markets."
Steven Beahan, Partner