HMRC was correct to cancel MOSS registration

The taxpayer made business-to-consumer (B2C) sales of electronic services to EU customers so registered for the mini one-stop shop (MOSS) scheme with HMRC to charge VAT according to the rate that applied in the customer’s country declaring this VAT on quarterly MOSS returns. The tax declared for each EU country is then forwarded by HMRC to the relevant tax authorities.

The taxpayer failed to submit its MOSS returns for three successive periods so HMRC cancelled the registration. As a result the company could not reapply for a new MOSS registration for two years and had to register separately for VAT in each EU country it made supplies. This doubled its VAT costs because of the administration issues.

The taxpayer appealed against HMRC’s decision to cancel the registration. It said HMRC had sent reminders to the online portal linked to the MOSS account threatening to cancel the registration but...