VAT Obligations for Selling Digital Software to UK Customers

My company is based in the UK and sells digital software products. We operate through an eCommerce platform, specifically Shopify, and seek clarity on our VAT obligations concerning sales to customers located in the UK. Our business model involves supplying digital software for download to b2b customers. Could you kindly advise us on whether our sales of digital software to UK customers through Shopify require us to account for and charge VAT? Thanks

Hi NIA ROSE,
If you are providing digital services to other businesses in the UK via a platform then your supply will be taxable at the rate of 20%.
It would only be different if you were making supplies to non business customers whereby the platform would be responsible in accounting for the VAT.
Please see the guidance here:
Digital portals, platforms, gateways and marketplaces.
Thank you.
 

Hi NIA ROSE, I would like to emphasise that Shopify is not considered liable for a VAT on the transactions that are processed over the web shops built on the Shopify platform. Reason for that is that Shopify doesn't sets the general terms and conditions of the web shops built on it's platform, authorises payment or handles delivery or download of the digital service. If above statements are true, then the platform operator would be responsible for accounting for the VAT payment that’s charged to the consumer.

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