VAT for United Kingdom
VAT - Value Added Tax. According to HMRC, VAT is a tax that is charged on most goods and services that VAT registered businesses provide in the UK. It is also charged on goods and some services that are imported from countries within and outside the European Union (EU).
You need to create a New Organisation and choose the United Kingdom as the country to make use of this feature.
UK VAT Moss
Enabling VAT
To enable VAT Rates for your organisation in Zoho Subscriptions,
- Navigate to gear icon > VAT > VAT Settings.
- Check the VAT Registration checkbox and provide the VAT Registration Number provided for you by HMRC.
- Click on Save to enable the VAT Rates.
Note: You can also enable International Trade checkbox if you’re business is trading with customers outside United Kingdom. This will give access to EC Sales Report, if you’ve integrated Zoho Books.
Adding new VAT Rate
To add a new VAT Rate,
- Navigate to gear icon > VAT > VAT Rates.
- Click on the + New VAT and enter the VAT Name and Rate(%).
- Click on Save.
If you’ve VAT Moss enabled for the organisation, then the EU Member State must be selected.
Editing a VAT Rate
To edit a VAT Rate,
- Navigate to gear icon > VAT > VAT Rates.
- Hover over the VAT Rate you’d want to edit and click on the edit icon that appears.
- Edit the details and click on Save.
Deleting a VAT Rate
To delete a VAT Rate,
- Navigate to gear icon > VAT > VAT Rates.
- Hover over the VAT Rate you’d want to edit and click on the trash icon that appears.
UK VAT MOSS
Overview
VAT MOSS (Mini One Stop Shop) scheme is for businesses which supply Digital Services to Consumers (Private individuals or non-business entities) in the European Union(EU). VAT will be levied according to the consumer’s location.
Digital Services:
Broadcasting, telecommunications and e-services fall under the digital services category. Examples of e-services are app downloads, video on demand, gaming, e-books, anti-virus software etc.
Why VAT MOSS?
If your business from the EU sells digital services to consumers in another EU country, VAT will be levied in accordance with the consumer’s EU member country. Your business needs to be registered for VAT with every EU member state where the digital services are being sold which is a pretty tenuous process.
By registering for the VAT MOSS Scheme, your business can skip the process of registering with every EU member state where you supply digital services to consumers.
Once the business registers with the VAT MOSS scheme a single MOSS VAT Return and a VAT Payment should be submitted to the tax agency every quarter. The respective country’s tax agency will take care of forwarding the return and tax payments to the tax authorities of the EU member states.
Conditions for VAT MOSS to be applicable?
VAT MOSS is applicable for digital services which are completely automated or electronically supplied over the internet with minimal/no human intervention.
These are the condition for VAT MOSS to be applicable:
- Supply digital services electronically.
- Digital services provided should be charged.
- Sell services only to Non-Business consumers in other EU member states.
- Sell services on your own website or platform (not using a third party platform / marketplace).
Who are not affected?
Communicating by email and sending attachments, using the internet to facilitate trade does not constitute e-services. Services that use the internet and does not come under the scheme:
- If order and processing are done electronically and goods are supplied physically. Also includes physical books, newspapers or journals.
- Consultants and Lawyers who advise their clients over email.
- Online ticket booking services for entertainment events, hotels or to hire transport.
- Online classroom courses, educational or professional courses delivered over the internet.
- Physical repair services for computer equipment made offline.
- Services for advertising on newspapers, posters and on television.
Enabling VAT Moss
To enable VAT Moss for your organisation,
- Navigate to gear icon > VAT > VAT Settings.
- Check the Are you registered for VAT MOSS? checkbox to enable VAT Moss.
- Click on Save.
Adding a new VAT Rate
To add a new VAT Rate,
- Navigate to gear icon > VAT > VAT Rates.
- Click on the + New VAT and enter the VAT Name, Rate(%) and select the EU Member State.
- Click on Save.
Creating a Digital Service as a Plan
To create a digital service,
- Navigate to the Products tab.
- Click on Add Plan and enter the details of the digital service you provide in the plan creation form.
- When selecting the product Type, select Services and enable the checkbox IS it a digital service?.
- Click on Save.
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