EU business providing digital services to UK consumers

We are a small business located in the EU selling downloadable software online, mostly to consumers. Since EU/MOSS has been disrupted after Brexit, we have registered for VAT with HMRC and have been reporting returns and making payments via credit card since. Now out of a sudden, credit card payment no longer works. One possible reason mentioned on the HMRC site is that payment may fail if the card is not issued in the UK. Obviously it isn't, as we are a German business. Now that there are virtually no more ways left to make a payment, neither via direct debit, SEPA, IBAN, or otherwise, I wonder if our VAT registration is even correct in the first place. The whole site and process seems to be targeted at domestic businesses only. We might have missed something. a) Where do we need to register for VAT? b) How are we supposed to make payments from Germany? c) Does a revenue threshold apply for overseas businesses? Thanks in advance.

Your question is confusing....you state you are VAT registered with HMRC, but then your question a) asks where you need to register for VAT. So are you UK VAT registered or not UK VAT registered? The UK does not operate the EU wide simplification of MOSS but the logic remains the same, you are non-UK business selling digital services to UK customers. Place of supply of B2C digital services is where the customer is (UK), therefore you are required to register for UK VAT, there is a Nil VAT threshold for non-established (non-UK based) traders. This is the same rule in the EU, a UK business selling to EU consumers would be required to register for VAT in each EU member state where they sell to EU consumer or the UK entity can register for the simplification MOSS/OSS (One Stop Shop). https://www.gov.uk/guidance/the-vat-rules-if-you-supply-digital-services-to-private-consumers You register for UK VAT via the HMRC website https://www.gov.uk/register-for-vat where you first need to create a "government gateway", a "portal" for your VAT account, almost all EU member states operate an online VAT portal, UK no different. Once signed up for the portal, you can then register for VAT, or if you are already UK VAT registered, the portal is where you can review your VAT returns, payments, etc. You cannot pay your VAT liability with a personal credit card, that has never been permitted. You can pay with a debit card. https://www.gov.uk/pay-vat/by-debit-or-credit-card-online You can also make payment from an overseas bank account but the HMRC payment details are different to the details used if you are paying from a UK bank. https://www.gov.uk/pay-vat/bank-details If your credit card is not allowing payment, first check the payment is going to the bank details related to HMRC's overseas payment account and not the UK account and also make sure you are paying in sterling/GBP, HMRC do not accept payment in Euro/foreign foreign currencies. None of these issues are Brexit related, most EU member states do not allow payment via credit card, do not allow payment in foreign currencies, etc. Also, all EU member states tax offices have a single portal designed primarily for domestic taxpayers and foreign entities have to apply for VAT/other taxes the same as any other domestic business, a UK business would therefore have to navigate the German tax office website in German for example.

Thank you for your help. We are indeed already registered for VAT. The question was meant to confirm that we are registered with the correct government service and website. We can login to the HMRC site, review VAT returns and submit payments (up to the point were the card is rejected), so I assume this is the "portal" you mentioned. Our corporate credit card worked well in the past (paying in Pound Sterling) but is now rejected. If this isn't a temporary technical problem, we'll have to figure out the overseas bank transfer option. Thanks again for the details. The technical issues have nothing to do with Brexit, but it added friction for small businesses, freelancers, content publishers, etc. I don't know how much that adds up to in the grand scheme of things, but doing business with the UK has become more time-consuming and complicated. Finding your way around German bureaucracy is no better, so be it ;-)

Update: This has been a temporary disruption for whatever reason. Credit card payment works again.

Hi,

You can find the details to make a payment from a German Bank account here:

Pay your VAT bill

If your supplies are only B2B then your UK customer would account for the VAT under the reverse charge, see VAT Notice 741A, section 6.

Place of supply of services (VAT Notice 741A)

If that is the case you would not have a right to register for UK VAT.

Thank you.