Nick McChesney answers a query on VAT on app sales, considering the impact of changes effective from next January
My client is a small UK business developing apps for consumers to use on mobile devices such as smartphones and tablet computers. It does not have the scale and infrastructure to support the marketing and distribution of these consumer products so it plans to distribute them through one of the online app marketplaces in the EU. The business is aiming to generate revenue from its first premium product of 69p per app sale which is after deducting the commission payable to the operator of the marketplace. Will it need to account for VAT on sales income and if so at what rate?
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