VAT – Mini One Stop Shop

From 1 January 2015 changes will come into effect for businesses supplying digital services such as broadcasting, telecoms and e-services. Currently these supplies are taxed in the Member State in which the business is established. However, from 2015, the place of supply will be determined by the location of the customer who receives the service. This change will mean that businesses who supply these services will not have to register for VAT in every EU Member State where they have customers.

To save the need for businesses affected by these changes to register for VAT in other Member States, a Mini One Stop Shop (MOSS) will be introduced. The MOSS scheme will allow businesses affected by the changes to avoid registering for VAT in every EU Member State where they make supplies.

The MOSS will be an electronic system that will allow businesses the option of registering in one EU jurisdiction and accounting for VAT due in other Member States using a single return. Businesses will be able to register for VAT MOSS from October 2014 and the service will be available from 1 January 2015. The use of the MOSS will be optional.

Businesses affected by the changes will include those selling apps (including smartphone games), e-books, streaming services (of sports/ film/ tv/ music), radio broadcasting, dating services and journals, newspapers and magazines that are subscribed to electronically.

There will be two schemes, one for businesses established within the EU and one for businesses that are not established in the EU. For EU businesses the submission of an MOSS return would be an additional responsibility on top of their regular domestic VAT return. The current VAT on e-Services (VoES) scheme for non-EU businesses will be replaced by the MOSS and existing VoES users may transfer to the new scheme.

Sally Beggs, Deputy Director Indirect Tax, HMRC, said:

‘The VAT MOSS is a tool that saves digital services suppliers from having to register for VAT in every member state in which they sell such services. Businesses with their main operation or headquarters in the UK will register with HMRC to use the service. They can register for the online service and then authorise an agent to act on their behalf.’

Back


Case Studies

The Tax Man

Minimise the stress of an investigation and make use of our extensive experience in securing best outcome for our clients

Business Valuation in Distress

Take advantage of our impartial and rigorous due diligence procedures

FD in The Cupboard

Our innovative ideas are here to improve your business performance and secure appropriate and cost effective funding

Contact us

For a FREE initial consultation
For a Fixed Fee Quotation

BY POST OR IN PERSON

Chandos House, School Lane Buckingham,
Buckinghamshire MK18 1HD

BY TELEPHONE

01280 823904

BY FAX

01280 822090

BY EMAIL

info@tearlecarver.co.uk

The Tax Man

The Tax Man

A new client was introduced to us via a recommendation with whom we arranged to meet on a regular basis in order to determine a number of changes that we felt were needed to their business structure. The client was at the time operating as a husband and wife partnership. The business was flourishing and had a number of large contracts with big organisations.

At the start of the process they were still heavily immersed in their day to day operations so we can get a full flavour for their ambitions, aspirations and growth plans. We quickly recognised there were sufficient tax savings which can be achieved by changing the structure from a partnership to a corporate entity. We carried out a business valuation and disposed of the goodwill from the old to the new business. Unfortunately, as often is the case with efficient tax planning, HMRC got involved and disputed our valuation.

An HMRC investigation can be a very stressful time for any client, even for those best prepared. However, our client had minimal input in the HMRC communication as we dealt with this professionally behind the scene. As an added benefit, our client could rest on the security that all work was covered by insurance and therefore all costs and time in dealing with this enquiry were covered by the fee protection policy we had put in place.

The initial approach taken by HMRC was very aggressive and they tried to present an argument that there was no goodwill in the business. We challenged HMRC’s view that the goodwill was worthless. After lengthy correspondence and numerous telephone calls, HMRC agreed 100% with our original valuation, which preserved our original tax saving plan for the client. Tax savings on this case where in the region of £75K at the outset, with ongoing savings of £6,000 per annum. We are pleased to add another happy client to our portfolio.

Business Valuation in Distress

Business Valuation in Distress

Selling a business is never an easy process, but when disputes arise, the need for a reliable third party due diligence process is even greater.

Tearle & Carver have extensive understanding of the requirements for remaining objective when managing a potentially difficult company buyout. In one such case, we were approached by the courts to act as independent accountant for an acrimonious business sale in which one partner was exiting the business and selling shares to the other. Given the circumstances, both sides had totally polar views of what their business was worth.

After arranging an initial meeting with the company, we were thorough in ensuring we completed due diligence, validating the figures in the accounting records, carrying out adjustments where appropriate, and drafting a set of reliable management figures within the framework required by the court.

A draft version of the report detailing our findings and conclusions was submitted to both parties, giving them the opportunity to voice any queries or concerns and ensure all relevant factors had been taken into account.

Through this process, we were able to submit a final report to the courts that was both binding and acceptable to both parties, effectively resolving what could otherwise have been a time consuming and costly process for all sides.

FD in The Cupboard

FD in The Cupboard

For smaller companies, it is often not possible or cost effective to pay for a full-time Financial Director.
Many of our clients therefore make use of Tearle & Carver’s extensive expertise to provide the services of an FD as and when required.

In this case, we were approached by the management team of an organisation looking to acquire the existing business via an MBO (Management buy out). Their business plan had proved ineffective for securing funding, and what they needed was financial expertise from someone with a developed understanding of the company’s internal workings.

Tearle & Carver helped deliver the solution our clients were looking through utilising our bank contacts in order to make the MBO viable, while also building a robust business plan and preparing our client for the rigorous vetting process. To help with cash flow issues, we introduced factoring which led to improved cash flow management.

We advised on the appropriate business valuation and structure, and continued to prepare monthly accounts to track profgress once the management were fully in command of all the information they needed to move their business forward.

In order to best assist these clients through the crucial first year of ownership, we attended board meetings on a regular basis, a service that we continue to provide to date.

With our continually developing understanding of their business, this client is able to remain confident that Tearle & Carver can provide any financial support they may need, now and in the future.