VAT businesses supplying digital services to consumers

HMRC have announced:

“On 1 January 2015 changes will be made to the European Union (EU) VAT place of supply of services rules involving business to consumer supplies of digital services (broadcasting, telecommunications and e-services).

From this date, the place of taxation of these digital services will be determined by the location of the customer who receives the service, rather than the location of the supplier of the services.

A new online service, the VAT Mini One Stop Shop (VAT MOSS), is being introduced so that suppliers of digital services don’t have to register in every EU member state in which they have customers. Businesses can register to use VAT MOSS from 20 October 2014 and the online service will be available to use from 1 January 2015.”

Scary stuff!!

Note however, this only affects UK businesses who sell to the non businesses in the EU (consumer = “Joe Public”)

What are digital services – well, very very broadly – they are sales where no goods pass hands, and where there is very little human involvement.. think software download sales, subscriptions to PDF reports, web hosting services.

Does this affect you? Don’t leave it until the last minute. Get advice early, and be ready!

Further reading:

Fox donates to the Phillipined Red Cross

The harrowing scenes showing the destruction caused Typhoon Haiyan has brought a solemn day at The Den.  Fox will donate today’s earnings to the Phillipines Red Cross.  Our sympathies go out to all those who have been affected by this tragedy, both here and abroad, and our thanks and respect go to all those who are working tirelessly to provide aid.



Time is running out for higher income parents to register for Self Assessment

Higher income parents currently receiving Child Benefit have just four weeks to register for Self Assessment with HM Revenue and Customs (HMRC) in order to avoid a penalty.

Parents who stopped receiving Child Benefit payments before 7 January 2013 do not need to take any action. However, parents who did not stop their payments until after 7 January or who are continuing to receive Child Benefit, and with income over £50,000, must register for Self Assessment for the 2012-13 tax year by 5 October 2013. This will enable them to declare the Child Benefit received, pay the tax charge on time and avoid penalties for failure to notify HMRC on time.

Letters are currently being sent to around two million higher rate taxpayers, including those affected by recent changes to Child Benefit. These will remind them they must declare any additional income or register now with HMRC for Self Assessment, in order to pay the High Income Child Benefit Charge, if they have not already done so.

HMRC’s Chief Executive, Lin Homer, said:

“HMRC wants to ensure that people avoid possible penalties and pay the right amount of tax. If you had any additional income last year, or have been affected by the changes to Child Benefit, you have until 5 October to register for Self Assessment.”

Over 400,000 people with higher incomes have already opted out of receiving Child Benefit payments. Those who did not receive any payments relating to the period after 7 January do not need to register for Self Assessment.

People who fail to register could face a penalty of up to 100 per cent of the tax due, depending on the circumstances. They might be able to come out of Self Assessment in future years if they (or their partner if they are the Child Benefit recipient) choose to opt out of receiving Child Benefit and avoid incurring the tax charge. People who want to opt out should go to


An exciting day at the Den, today!  We have been nominated for

The Bookkeepers Network  - “Most Innovative Accounting Firm” award.

If you would like to show your support, you can vote here:



Cash Accounting Basis for small business

The cash basis is essentially a money-in, money-out approach. A business using the cash basis only needs to record sales when the money is actually received and payments when the money is actually paid out. The cash basis does not
change the rules for the deductibility of expenses, only the time at which the deduction is given. What’s more, no account is taken of money owed to the business or that the business owes.

Under the cash basis, there is no need to take account of debtors, creditors, stock, prepayments and accruals, making it much simpler for a business owner without an accounting background to understand and operate. They just pay tax
on money that has been received, helping the business manage cash flow.

The cash basis is open to sole traders and partnerships whose income is below the VAT registration threshold. This is set at £79,000 for 2013/14. VAT registered businesses qualify as long as their income is below that threshold.

Once a business has opted to use the cash basis, it can continue to do so even if its income rises above the VAT threshold, as long as income does not exceed £158,000. Above this level, the business must leave the cash basis and return to
the accruals basis.

The cash basis rules will not suit every business and there are some restrictions. It may not be the best option if a business has losses to relieve against other income in the same year or if it has high borrowings and deductible interest of
more than £500 – neither of these are permitted under the cash basis. Certain types of business are also precluded from using the cash basis. A full list is available at
Qualifying businesses can switch to the cash basis from 2013/14 by simply starting to use it and ticking the cash basis box on the self-assessment return.

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