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Stopping the spread of MOSS

Posted: May 1, 2015

Initial indications for the first quarter following the introduction of the Mini One Stop Shop (MOSS) mechanism were that far fewer businesses were registering for the system than was anticipated – – see the previous ‘Burgess Hodgson News’ item on the website for the figures.

Added to this lack of take-up for the new system – a system that makes it compulsory for anyone selling to other EU customers any broadcasting, telecommunications and e-commerce services (apps, film and music downloads, etc.) – there has been some interesting feedback on the actual costs involved in setting up the required software to account for these sales. As so many of these suppliers tend to be smaller enterprises any such cost tends to be significant in terms of profitability and, in many cases, viability.

With the requirement that ANY sale to a non-business customer in another Member State must be recorded, this often means that VAT values of a few pence only must be treated seriously and accounted for accordingly. This can lead to a faintly ludicrous position whereby the supplier has had to spend quite significant amounts of cash and time putting in place the mechanisms required to account for insignificant amounts of VAT.

Underlying all of this is the looming presence of some of the ‘household names’ in the electronic platform world – the sellers of films, music and pretty much everything else buyable through a pc, laptop, tablet, Smartphone or, more recently, even a watch! They – similarly to the apocryphal ‘one man band’ supplier – have to register and account for MOSS sales in the same way, however their ability to take on board this administrative requirement is far greater than those smaller enterprises.

For SMEs the pressure of time and money required to account for these sales can lead to one of three decisions – either carry on and suffer in relative silence and take the ‘hit’ of the added costs, chuck it all in and find another job (or possibly limit any sales to domestic-only, but this could infringeEU trading and discrimination rules) or – and here’s an interesting bit – give up making their own sales and throw their lot in with one of the Big Boys.

So the unintentional (?) result of the implementation of the new MOSS rules is that smaller businesses may have to give up some of their entrepreneurial spirit and profit and pay for the privilege of using the services of one of the internet giants. It remains to be seen whether those in control of this new system will be forced to review and amend the requirements in the light of this feedback.