Any VAT experts here familiar with digital download rules?
Discussion
I'm a little confused...let me explain...
I want to sell digital sheet music, downloaded through our website here in the UK.
Our main supplier mainly produces printed sheet music, but also books and magazines, and is VAT registered - we are not VAT registered. They would supply us the files in digital format, and we would do the final tweaking/converting before uploading them to our online store.
I know we have to charge VAT for EU sales, but as we're not registered is that still the case, and does our supplier have to collect the VAT as a business to business transaction (even though we're not registered)?
I know printed sheet music is zero-rated/exempt, but what about digital sheet music?
Any pointers appreciated - or if anyone can redirect me to a more suitable forum/website.
Many thanks
I want to sell digital sheet music, downloaded through our website here in the UK.
Our main supplier mainly produces printed sheet music, but also books and magazines, and is VAT registered - we are not VAT registered. They would supply us the files in digital format, and we would do the final tweaking/converting before uploading them to our online store.
I know we have to charge VAT for EU sales, but as we're not registered is that still the case, and does our supplier have to collect the VAT as a business to business transaction (even though we're not registered)?
I know printed sheet music is zero-rated/exempt, but what about digital sheet music?
Any pointers appreciated - or if anyone can redirect me to a more suitable forum/website.
Many thanks
Thanks for the feedback.
We definitely do not want to register if we don't have to, and are quite happy to absorb the increase in our buy-in price if it means we can avoid the dreaded VAT administration whilst we see how things go. We think it'll take some time to grow to that level as it's a very niche market at present.
Does our supplier have to account for the VAT if they're supplying us as digital files - I'm guessing so? In printed form they'd be zero-rated, but digital goods are classed as services under the new rules and the standard rate applies.
If we don't charge VAT for anything our prices are the same regardless of where they are bought and I'm assuming, we have no need to account for any EU/Rest of World differential pricing because of this?
The only outward effect is we absorb the VAT in our wholesale transaction and our supplier has to account for it but can reclaim?
We definitely do not want to register if we don't have to, and are quite happy to absorb the increase in our buy-in price if it means we can avoid the dreaded VAT administration whilst we see how things go. We think it'll take some time to grow to that level as it's a very niche market at present.
Does our supplier have to account for the VAT if they're supplying us as digital files - I'm guessing so? In printed form they'd be zero-rated, but digital goods are classed as services under the new rules and the standard rate applies.
If we don't charge VAT for anything our prices are the same regardless of where they are bought and I'm assuming, we have no need to account for any EU/Rest of World differential pricing because of this?
The only outward effect is we absorb the VAT in our wholesale transaction and our supplier has to account for it but can reclaim?
Eric Mc said:
Did you read the MOSS link?
Yes, and other HMRC pages and flow charts. They do imply registration under the MOSS scheme.There's a good discussion of it at https://rachelandrew.co.uk/archives/2014/11/25/how...
Thanks for the further pointers. I'm tempted to use the workarounds suggested for non-UK EU sales.
Personally, I think it's a terrible ruling, but I can understand something needs to be done with burgeoning digital sales.
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