VAT on online courses + VAT MOSS

Hello, I have read the following guideline https://www.gov.uk/guidance/the-vat-rules-if-you-supply-digital-services-to-private-consumers but still confused about some points. I am in UK and planning on creating and selling several online courses worldwide through my own website as a sole trader (not vat registered). These are not accredited by any universities, would not result in qualification or requirement of any sorts, just hobby courses. My students will be mostly individual consumers so B2C and maybe small percentage companies. These will be pre-recorded video lectures + discussion forum (where I will answer and moderate students questions) + pdf downloads document with a enrol now button. Students will get lifetime access whereby I will host it on my site, they don’t have to download anything on their computer. My queries are as follows: 1) Since there is an element of interactivity, is the above vat exempt (0 rated vat)? 2) What if I were to host live webinar on the website every month for all my paid students would I still be liable for VAT? 3) If yes for the above, what evidence do I need to keep for HMRC to prove that, should an enquiry arises? And how long do I need to hold this evidence? 4) For vat exemption does this live webinar have to happen monthly or would once in a lifetime suffice? What is the timeline in that? 5) Do I need to register VAT for worldwide or VAT MOSS, does the above apply for Europe and VAT MOSS? 6) Has vat moss got anything to do with HMRC in uk or is it outside UK jurisdiction? 7) What happens if I don’t register for worldwide vat or vat moss and just follow uk guideline on vat? 8) What if most of my students are non UK. Is 85,000 vat threshold for uk sales only (students within UK) or world wide sales? 9) I understand I have to keep 2 pieces of evidence to prove location (https://www.gov.uk/guidance/the-vat-rules-if-you-supply-digital-services-to-private-consumers#location) , how long do I need to keep this evidence? 10) My friend and I would like to jointly do this venture whereby she will help me with editing videos, website design, video screenplay, direction, answering questions on discussion forum etc. With revenue split equally between us as self employed initially. Do we have to register for vat if this jointly crosses 85,000gbp or individually crosses 85,000gbp? 11) Can vat be charged retrospectively ie if I make a mistake can HMRC go back and claim 20% of my previous years sale?

Hi,

If you are providing online courses to consumers/businesses overseas then the key aspect is to whether you are supplying digital services or not. If you are supplying digital services to consumers in the UK then this would be a taxable supply and would go toward your taxable turnover for VAT registration purposes.

If you are providing digital services to consumers in the EC then you would need to register for MOSS in the EU and charge the appropriate VAT depending on where your customer belongs.

If you are supplying digital services to consumers overseas then these will be outside the scope of VAT and will not go towards your UK taxable turnover for registration purposes. You can see guidance here:

How to determine the place of supply and taxation

Defining digital services

Place of supply of educational services

The above link will define the difference between digial services and education services.

If the services are non digital in nature then please see the guidance here:

B2C services of a professional, technical, financial, intellectual or other intangible nature supplied to customers outside the UK

If you are supplying digital supplies to consumers in the EU then, as stated, you would need to register for MOSS in the EU and this would be outside of UK jurisdiction

When deciding whether you need to register for VAT in the UK you would only include the supplies you make, which as a result of the place of supply rules are deemed to be taking place in the UK. Please see the guidance here:

The place of supply rules for services

Working out whether you need to register

You should keep any evidence you have to prove the location of your customer for 6 years:

Record-keeping rules for all VAT-registered businesses

If you are approaching this as a joint venture, and, or partnership please see the guidance here:

VATREG10000 - Entity to be registered: joint ventures and consortia

It is important to register for VAT at the correct time .If HMRC deem that you should have been registerered from an earlier point then you will need to account for VAT from the point of your registration date.

Thank you.



 

Dear HMRC Admin, you write that: "If the services are non digital in nature then please see the guidance here: B2C services of a professional, technical, financial, intellectual or other intangible nature supplied to customers outside the UK" That page says that such services (intellectual, non-digital) "are supplied where your customer belongs and so are outside the scope of UK VAT". Is this notion from UK legislation or EU legislation? I ask because there might be a mismatch between the two legislations where such services are deemed supplied where the customer belongs by UK law but where the supplier belongs by EU VAT law (the standard B2C rule). In this case would one need to register for MOSS and pay EU VAT? Thank you.

Hi atom,
The guidance is from section 12 of Notice 741a:
12. B2C services of a professional, technical, financial, intellectual or other intangible nature supplied to customers outside the UK
This guidance predates the UK leaving the EU and so there shouldn't be a conflict between UK law and EU law.
As long as the supply is not digital in nature then there should not be a requirement to register for VAT in the member states where your customers belong or to register for MOSS in the EU.
Thank you.