What is the VAT treatment for digital services?


If you sell digital services or digital products, you would need sign up for the VAT MOSS scheme in addition to registering and submitting VAT returns as normal. In practice, this is fairly straightforward and we are able to offer this service for £20 per month on top of the standard VAT fee.

The scheme exists because each European country wants a cut of the VAT pie if you sell to its citizens. Note, one of the tests for a service qualifying as a digital service is that it is offered without human intervention. This means that an off-the-shelf downloadable course would count as a digital service, but if you speak with the customer and curate the correct downloadable content to suit their specific needs, then this is now just a normal service rather than a digital service and the additional VAT requirements fall away.

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