Do you sell business-to-consumer services to private customers in the European Union? If so, you need to know that VAT rules are going to change from 1st July 2021 and you need to be ready. To help you, this post gives you an outline of current rules, plus the upcoming changes you need to know about – including the introduction of a new VAT One Stop Shop.

Current VAT rules for EU sales

At the moment, VAT rules for UK businesses trading with the EU are rather complex. You normally have to register in each of the EU member states you trade with. You then have to report and pay EU VAT in each of those countries. It can easily become a bureaucratic nightmare.

There have been exceptions. For example, a “Mini One Stop Shop” (MOSS) has applied for VAT on sales of digital services to the EU. This has allowed you to register for VAT in a single EU country and then declare VAT payable in a consolidated, quarterly return.

However, MOSS is about to disappear and be replaced by a wider-ranging scheme.

New VAT One Stop Shop Rules

From 1st July, the European Union will introduce a new VAT One Stop Shop (OSS) scheme. This is essentially an extension of the MOSS scheme, slightly simplified and extended to cover a wider range of supplies. You can read the full EU documentation here – but be warned: it runs to nearly 60 pages!

So, what does it mean for supplies of B2C services to the EU? Like the MOSS scheme, the new One Stop Shop does away with multiple VAT in different EU countries. Instead, you make a single VAT registration in an EU member state, but then charge and account for the VAT according to where in the EU your private customers are based.

For example, you could register for the VAT One Stop Shop scheme in France and submit your VAT return there. However, in that return you will account for sales to Germany, Italy, Spain, Holland and other EU member states according the VAT rate that applies to each, individual country.

Does the VAT One Stop Shop apply for the sale of goods?

Yes, but we have found that suppliers of B2C services are more likely to be unaware of the new One Stop Shop system. For further advice on the sale of goods, please talk to us.

What do I do next? 

If you trade with the EU, the best first step is to get specialist VAT advice. If you trade with multiple EU states, then the VAT One Stop Shop has the potential to save you a huge amount of admin. Not having to register for VAT in every relevant EU country has to be a good thing, surely!

However, to take advantage of the new scheme, you need to be fully aware of its rules. THP can help you understand these and apply them, as well as assisting you with your OSS registration. Once registered, we can also ensure your quarterly OSS VAT returns are submitted accurately and on time.

To find out more about how we can help, please get in touch with your THP account manager or use the form below to send us a message.

Get in touch by filling out the form, or by calling us on 0800 6520 025

Yes! Please sign me up to receive THP’s fortnightly Email Newsletter.
I have read and understand THP Limited's Privacy notice.
Avatar for Jon Pryse-Jones
About Jon Pryse-Jones

Since joining THP in 1978, Jon Pryse-Jones has been hands on with every area of the business. Now specialising in strategy, business planning, and marketing, Jon remains at the forefront of the growth and development at THP.

An ideas man, Jon enjoys getting the most out of all situations, “I act as a catalyst for creative people and encourage them to think outside the box,” he says, “and I’m not afraid of being confrontational. It often leads to a better result for THP and its clients.”

Jon’s appreciation for THP extends to his fellow team members and the board.  “They really know how to run a successful business,” he says.  He’s keen on IT and systems development as critical to success, and he continues to guide THP to be at the cutting edge and effective.

Join The Conversation
ICAEW
Cyber Essentials Plus certification
Sign up for our Newsletter