UK: B2B VAT on purchase of electronic services.

GoDaddy vs Amazon Web Services VAT requirements

Why are there inconsistencies in VAT requirements between VATMOSS and UK entities for e-services?

We buy electronic services from GoDaddy (a domain name registrar) and Amazon Web Services (web hosting).

Both charge 20% VAT. At GoDaddy, if you enter a VAT ID, this is removed. I am not sure what happens at Amazon Web Services as their verification process is manual.

It is common knowledge that not being VAT registered means that we cannot reclaim VAT on purchases from other businesses in the UK (who are VAT registered). That is annoying and unfortunate.

What is not clear is how things work when dealing with international entities. Moreso when it is not immediately clear which entity you are dealing with.

GoDaddy have an EU prefixed VAT number attached to their invoices. As I understand that means that they are registered for VATMOSS and thus, as a business, technically we don’t have to pay VAT (as outlined https://www.gov.uk/guidance/the-vat-rules-if-you-supply-digital-services…).

Amazon Web Service on the other hand seems to have a more complex setup (https://aws.amazon.com/legal/aws-emea/#6) involving an established UK entity and UK VAT number.

This presents an inconsistency non VAT registered companies such as ourselves have to suck it up in relation to VAT registered UK businesses, but dont in relation to international VATMOSS registered businesses. Why is this?

Both companies are massive yet use different systems.

GoDaddy seems to have a GB VAT registration ID as well (https://vat-search.co.uk/ocvWG_GO+Daddy+Europe+Limited) but their invoices list the EU prefixed one. Given that their system is essentially a self monitored one whereby you specify if you should be paying VAT it seems subject to significant risk. Whilst they are using the VATMOSS ID I don’t have to pay VAT yet if they start using their UK subsidiary (I don’t know why they arn’t) then all of a sudden I need to pay it..

To throw a further spanner in the works, other domain name registrars such as Namecheap.com do not charge VAT at all. As far as I can tell they are wholly USA based, and have no VAT registration ID covering the EU in any capacity.

Source – accountingweb.co.uk