We managed to submit our first VAT MOSS return and it went surprisingly more smoothly than we anticipated. We had a pack of bandages ready for the pain we were about to experience! But it all went well without any major problems.
We had a look at our database and queried it to find records of all transactions that had VAT applied to it and we provided this to our accountant in a simple report. This report contained total sales broken down by EU countries except the UK. We don’t charge VAT to UK buyers as we are based in the UK and our UK sales do not reach the VAT threshold as most of our customers are based outside the EU.
Our awesome accountant then took the report we provided and submitted it to HMRC via the MOSS system. For our first return, we opted for the manual entry option rather than uploading a file. On our next return, we plan to generate an XML or a CSV file that can be simply uploaded to HMRC so that we can streamline the process.
We did have one hiccup where some buyers supplied a different country to the one we detected. For these buyers, we decided to pay the VAT out of our own pocket rather than chasing them up on it. Fortunately, the amount we paid because of this was very small.
This is one of the first screens you may be presented with when starting the MOSS submission process.
Since we opted to submit our return manually, we were presented with a screen where we could choose each EU country and enter our total sales for that country. The system will then calculate VAT automatically based on the sales.
As you submit your return, you get a nice overview screen to show submitted VAT by country. I’ve edited the screenshot for confidentiality reasons.
Once you are ready to submit, you must agree to a declaration that what you have submitted is accurate and complete to the best of your knowledge.
We will be repeating this process every quarter which creates a bit of an administrative burden for us but it’s worth it if it means thousands of authors don’t have do the same.