Does this constitute as a 'digital service' for VAT MOSS?

[mark7144]

Example business: https://www.soothe.com/

I assume this company lists the therapists on their website and in return the therapists provide a percentage of their earnings of any business they get via that platform.

My question: In the scenario that the platform cannot prove each therapist is B2B (e.g. no VAT number). Would the platform be liable to pay VAT MOSS for that fee?

It fee occurs digitally but it's originating from a service that is hands-on and unique to each customer rather than say, selling an eBook.

 

[Scalloway]

Are the customers based throughout the EU?

 

[mark7144]

In my case, which is very similar to the above, mostly the US but some in EU countries.

 

[Alan]

Is it a digital service? That is the question.

https://www.gov.uk/guidance/the-vat...-services-to-private-consumers#define-digital

 

[TheCyclingProgrammer]

For services you don’t need a VAT number to prove it’s a B2B transaction. If you are confident the customer is a business and can provide alternative evidence to back that up then no VAT number is required.

The very fact that the website is acting as a platform for other therapy businesses would seem to make it very obvious to me that it’s providing a B2B service. I would be happy to treat it as B2B and make that argument with HMRC.

Because of that the fact that the service is supplied digitally is neither here nor there. The supply is outside the scope of UK VAT if the customer is outside the UK.

For EU customers you should still collect their VAT number if they have one and report the sales on an EC sales list.

 

[mark7144]

Thanks for your reply.

I've read a couple of old articles that said one of the reasons VAT MOSS is terrible for small businesses is because HMRC requires a VAT number as proof of selling to B2B. And because small businesses often sell to other small businesses, usually there is no VAT number to be obtained.

So is that basically an outdated perspective then?

I don't ask our EU customers for a VAT number but they do electronically sign a contractor stating that they are 'independent contractors' so hopefully that sufficient. We also have their address and card details.

 

[TheCyclingProgrammer]

The link posted above explains what kind of evidence you can keep without a VAT number and a contract and business details should be sufficient but I do think you need to collect their VAT number if they have one for EC sales list reporting.

 

[mark7144]

Ah ok so as I understand it, EC Sales List is only something I need to do IF my business is VAT registered or reaches the threshold, which it hasn't quite yet. So once that does occur, I'll need to ask my customers if they have a VAT number or not.

 

[TheCyclingProgrammer]

Ah ok so as I understand it, EC Sales List is only something I need to do IF my business is VAT registered or reaches the threshold, which it hasn't quite yet. So once that does occur, I'll need to ask my customers if they have a VAT number or not.

Correct, I was under the impression you were already VAT registered.

 

[mark7144]

I'm fairly close to the threshold but not yet registered. But I wondered whether VAT MOSS was something I should have been registered to already. Based on what you've said, it sounds like it isn't really applicable to me which is a relief. Thanks for helping me.