There has been a lot of media discussion recently about changes to the VAT rules that apply to broadcasting and electronic services from 1 Jan 2015. Lots of people who sell materials online have been concerned that the new rules apply to them. The first point is that the new rules only apply to services supplied to consumers in the EU rather than businesses. Consumers are essentially those customers who cannot provide a VAT number. In practice many electronic service providers use third parties to provide their services. The portal or aggregator signs up the customer and takes the money. In these cases the intention is that the portal operator will have to worry about the new rules rather than the content provider. An electronic service is defined as something delivered electronically without any human intervention. Thus an e book, a photographic download or a video download will be an electronic service. In contrast a live workshop, a physical book ordered online or an email delivery of a commissioned photograph will not be. The pre Jan 15 VAT rules mean that these supplies are treated as being made, and subject to VAT, in the EU country of the supplier. This is why when you buy a Kindle download from Amazon you pay low Luxembourg VAT rather than UK VAT. Since the UK has a high VAT registration limit it is possible for a UK service provider to make a lot of supplies to consumers throughout the EU and not be VAT registered. The changes that come in on 1 Jan 2015 change the place of supply to the EU country of the customer. So from then you will pay 20% on your Kindle download. There will be no registration threshold equivalent to the UK registration limit as most EU VAT systems don’t have one. So theoretically if you supplied say an online delivered pre recorded Pilates class to Germany you would have to register for German VAT. To stop people having to VAT register in lots of different member states you can just register in your own state using a special type of registration called the Mini One Stop Shop (MOSS). Under this VAT registration you can account for VAT in all EU member states.If you are below the UK limit then you can have a special VAT registration that only applies elsewhere in the EU and means your UK supplies remain free of VAT The MOSS is now live and if you provide any electric services to consumers elsewhere in the EU then you should register. If you have to register for MOSS but are below the UK registration limit then HMRC have confirmed you will not need a UK VAT registration so your UK supplies can remain VAT free. HMRC have publicised a fairly clear guide to the new rules in their Brief 46(2014): https://www.gov.uk/government/publications/revenue-and-customs-brief-46-2014-vat-rule-change-and-the-vat-mini-one-stop-shop-additional-guidance/revenue-and-customs-brief-46-2014-vat-rule-change-and-the-vat-mini-one-stop-shop-additional-guidance If you have any other questions then please contact me.