UK EU VAT on Digital goods/services

Jan 7, 2018
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United Kingdom
I have a limited company which is not VAT registered and have an online store which sells physical items to the UK and Ireland -I am soon to extend this to World Wide.

I wish to sell products which may be considered digital products and therefore the EU VAT Place of Supply Rules would apply.

I am trying to find clarification as to how best approach the handling of the VAT.

My customers will be a mixture of B2C and B2B - and some of the B2B customers would be VAT registered, and some not.

What is the best course of action for me to take so that I do not need to charge VAT on the rest of my products?

I have found this paragraph online (

HMRC has also updated its guidance recently, saying now that if you who want to use MOSS and your turnover is below the UK’s £85,000 VAT threshold (2017/18) then there will be a “simplified” registration arrangement. This will allow you to register for UK VAT and MOSS, receive a UK VAT number, but NOT be liable to pay VAT on UK sales.​

Am I correct in understanding that I need to:

  • Register for VAT using the 'simplified' arrangement to receive a UK VAT Number
  • Register for the MOSS service
  • Charge the relevant VAT only on my digital products/services to any B2C customer in the EU
  • Do not charge the relevant VAT on my digital products/services to any B2B customer in the EU
  • Do not charge any VAT on digital products/services to any customer outside the EU
  • Do not charge any VAT on other physical products
  • Every quarter, pay HMRC/MOSS/Taxman the VAT collected only on the digital products sold to B2C customers in the EU
  • Do not claim back any VAT for any purchases made by the company

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