HMRC have recognised the difficulties small businesses making supplies of digital services to consumers in other EU member states, and have introduced some simplifications to assist. Firstly – businesses which are below the UK VAT registration threshold will now be allowed to rely on any single piece of information (for example, the address provided but the customer) to determine the location of their customer. This differs from the normal rule – which is that a business must collect two pieces of non-contradictory information to evidence their customer’s location.
It’s also been noted by HMRC that whilst there is no registration threshold for cross border supplies of electronic services (and therefore businesses of all sizes fall within the scope of the MOSS changes introduced in January of last year) – they have had some submissions which relate to non-business supplies. If an activity is carried out as a hobby, this will not be classified as being made in the course or furtherance of a business and a VAT MOSS return will not be required.