We thought it worth a very brief signpost to some new initiatives that could help two specific groups of typical small business or freelancer…
Historically, businesses within the EU, that are supplying goods and services to customers in other EU countries, have not had to register for VAT in the countries to which they provide them (only in the country of origin). For some ‘electronically supplied services’, such as e-books, apps and streaming, this is to change from January next year.
From this point, suppliers of services that are provided electronically will have to be registered for VAT in all of the destination countries and to account for VAT on supplies in these states. This applies to products that are actually delivered electronically, i.e. not traditional e-commerce, i.e. goods that are simply advertised, found and ordered online – the rules for these are unchanged.
The process can, however, be simplified by registering to use HMRC’s ‘Mini One Stop Shop’ (MOSS) service. Using this, small businesses affected can apply for VAT registration in one EU state and then account for VAT in each country using this single VAT registration, rather than having to register in each country individually.
The government expects up to 40,000 small businesses in the UK to use the facility.
An HMRC Q&A video is also now available to view on YouTube.
The Home Business Initiative, launched by the government in August, relaxes planning laws on home offices, clarifies that business rates will not apply (in most cases) and allows tenants to run businesses from home without affecting their lease status. The government estimates there are some 2.9 million homeworkers in the UK.