Starlight
Hi, I am a UK based model. I produce sell mild fetish clips online via numerous US based big fetish clip sites.
I upload the content to their servers and the content is sold via the websites worldwide.
The websites I sell via process the online payments from worldwide customers, set the website terms and conditions and handle the delivery of the file to the customer once purchased.
I never receive customer information for confidentiality reasons.
The websites I sell via typically take 40% commission on all sales.
I get paid out to my UK bank acount once per month once I reach a threshold that I set ($3000 for example).

My question is regarding the VAT MOSS scheme.
I just found out my chance, that this law was implemented in 2015 which states that VAT should be paid on sales of digital services online if the customer(s) are based in the EU.
Also that the VAT needs to be charged at the rate of the customers country!
So HMRC have implemented the VAT MOSS scheme to make it easier to pay it. But to make matters worse the threshold for registering for VAT on these sales is only £8800!

Here is the main link:
https://www.gov.uk/government/collections/vat-moss-vat-on-sales-of-digital-services-in-the-eu

HOWEVER... there is a part of the documentation which states the following:-

"Unless you sell digital services entirely through digital platforms or marketplaces, who take on responsibility for accounting for the VAT due, you must consider how you intend to account for VAT on supplies of digital services to consumers."

and also this was stated:

"Digital portals, platforms, gateways and marketplaces If you supply e-services to consumers through an internet portal, gateway or marketplace, you need to determine whether you’re making the supply to the consumer, or to the platform operator. The platform operator is supplying the consumer if the platform operator identified you as the seller but, sets the general terms and conditions, authorises payment or handles delivery or download of the digital service. Then the platform operator would be responsible for accounting for the VAT payment that’s charged to the consumer."

Source: https://www.gov.uk/guidance/the-vat-rules-if-you-supply-digital-services-to-private-consumers#vat-accounting-options-for-uk-businesses-supplying-digital-services-to-consumers

So, as I sell via online platforms/websites am I exempt from paying VAT on my digital sales?

I am presuming that I am ok and do not need to pay vat. Which would be impossible to calculate anyway because my customers are worldwide, I do not see their details or locations and some of which will be non-EU based.

I don't have many expenses either so I could not claim back VAT.

If someone could please confirm, I would really appreciate it as it is something that has been stressing me out for weeks now.  Sorry if I have posted this in the wrong section.

Thanks.
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VAT-adviser

Firstly your supplies fit squares on the digital services – see list here: https://www.gov.uk/guidance/the-vat-rules-if-you-supply-digital-services-to-private-consumers#define-digital

 

However in your case, it seems this para is applicable “Unless you sell digital services entirely through digital platforms or marketplaces, who take on responsibility for accounting for the VAT due, you must consider how you intend to account for VAT on supplies of digital services to consumers”, in which case you don’t need to worry about VAT registration.

 

It might be worth asking the platform providers on who takes on responsibility for accounting for the VAT due.

 

Hope this helps.

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Starlight
VAT-adviser wrote:

Firstly your supplies fit squares on the digital services – see list here: https://www.gov.uk/guidance/the-vat-rules-if-you-supply-digital-services-to-private-consumers#define-digital

 

However in your case, it seems this para is applicable “Unless you sell digital services entirely through digital platforms or marketplaces, who take on responsibility for accounting for the VAT due, you must consider how you intend to account for VAT on supplies of digital services to consumers”, in which case you don’t need to worry about VAT registration.

 

It might be worth asking the platform providers on who takes on responsibility for accounting for the VAT due.

 

Hope this helps.



Hi, many thanks for the reply.
Yes, I thought I should be ok with that.

However, one of the US based platforms I sell via replied with this when asked if they are taking on the VAT responsibility:

"No, we currently do not pay VAT.  But we are working on implementing it into the site, but it is a slow and expensive process and will require legal advice before we can go ahead.
We cant provide tax advice, but also we don't have much info on this.
As soon as we find out more and get a better understanding we will make announcements to our EU based stores."

Firstly it sounds like they have no knowledge about this VAT law to EU consumers (hence their statement of making announcements to EU based stores! It affects worldwide providers of digital content to EU based customers, not just EU based stores).

I am still waiting on some other platforms I sell via to get back to me - lets see what they come back with.

So my next question is.... what happens in my case if they all say they do not take on the VAT responsiblity?  Surely I am not liable?  Afterall, these platforms take 40% commission, leaving me with 60%, of which I pay income tax and National Insurance on.   Would I have to tell HMRC where I am selling via?  Basically getting them in trouble?

And one last question is, what happens for me, if I reach £85,000 VAT threshold?  Will I then have to register for VAT even though my type of earnings are exempt from VAT as I sell via digital marketplaces?
What would I do, just zero the VAT then explain why?

Ugh, any advice would be appreciated.

Many thanks in advance.


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