I sell digital products and asked on the HMRC forum if sales to US / EU needed to included on the VAT form. Their reply is as follows:
'If you are making digital supplies to consumers in the EU then you would either have to register for VAT in all the member states where you make supplies to or register for MOSS(OSS) in a country of your choosing.
These supplies would still need to be recorded on your VAT return as Outside The Scope supplies,
If you are supplying services outside the EU then ,again,the supplies would be Outside The Scope of UK VAT and would still need to be recorded on your VAT return’
I have tried to create a sales invoice and have indicated that it is out of scope but according to the notes on Quickfile, ‘out of scope invoices’ are not included on the VAT return - see below:
Out of Scope Use this option when you want to completely exclude the invoice from your VAT return.
Is this a bug or have I been given the wrong information by HMRC?
supplies to EU member states, if the goods are moved from Northern Ireland (that is any figure entered in box 8)
supplies of installed or assembled goods in the UK where the overseas supplier registers for VAT here
distance sales to Northern Ireland which are above the distance selling threshold or, if below the threshold the overseas supplier opts to register for VAT in the UK
I have faced this issue previously where I used the ‘out of scope’ option in QuickFile and the accountant picked up that my VAT returns did not total with my turnover. HMRC and QuickFile my have different definitions but I think the important thing is that the values need to be included in the VAT return. I just set the sales to 0% VAT but leave the checkbox for ‘out of scope’ unchecked which seems like the correct thing to do. Interested to hear if you find out otherwise.
VAT Exempt - If Business to business, Box 6 only completed (supply deemed to be made where Customer is) supplies are therefore outside the scope of UK VAT
If the invoice is logged in QuickFile as 0% VAT then either zero rated or exempt should report the net in box 6 (and there is no VAT). But if you’re wanting to list non-UK VAT in the VAT column of your invoices - the local VAT for each customer country that you’re reporting through OSS - then I’m not sure how that would work. @QFSteve can an invoice be marked “exempt” but also have non-zero VAT on it? And if so, does that still just put the net in box 6 and nothing in box 1 or does it try to put the (non-UK) VAT in box 1 as well?
@JemimaPuddleduck How do your EU sales work? Are you invoicing your overseas customers yourself from QuickFile or are you using some other platform or marketplace to generate the paperwork that gets sent to the end consumer?
