If you are a business that transacts with customers in the EU, the following update may be important for you.
But first, for those not familiar with VAT, here's a quick recap.
What is VAT?
VAT stands for Value-Added Tax. It's a consumption tax that applies to most goods and services sold within the EU (and UK), both physical and digital.
For digital services, the seller (your business) is obliged to collect VAT from a customer whenever they are located within a country that has a VAT taxation scheme and later pay it to the relevant countries authority dependant upon the location of the customer.
For more information, please refer to https://ec.europa.eu/taxation_customs/business/vat/what-is-vat_en
What has changed?
On January 1st, 2021, the UK formally left the EU. As a result of that, the UK also exited the EU VAT regime.
The outcome is that the single centralised VIES platform, which until now could be used for validating the VAT numbers of all EU countries, including the UK, has discontinued support for validating UK VAT numbers.
Why does this matter?
When you make a sale, you don't always have to charge your customer VAT. If the customer is a business and has a valid VAT registration number, the transaction may qualify for the reverse charge or zero rating.
The reason this matters is because at the time of signup, WHMCS will, if enabled, attempt to validate VAT numbers for you automatically.
In order to continue to validate UK VAT numbers successfully, an update is needed.
How do I get the update?
Today we have published updates for all actively supported versions of the WHMCS product. Choose the version you are running below, and download the appropriate patch.
V7.10.2 - https://www.whmcs.com/download/1453/v710-vat-number-validation-patch
V8.0.4 - https://www.whmcs.com/download/1457/v80-vat-number-validation-patch
To apply the patch, download the zip file, unzip it, and then upload the contents to the root directory of your WHMCS installation.
Following applying the patch, you will need to navigate to Configuration > System Settings > Tax Configuration
, select the "VAT Settings"
tab, and check the box to enable UK HMRC VAT Validation. You will need to provide API Credentials which can be obtained freely by creating an HMRC API application via the HMRC Developer Hub.
For more information, including a complete guide for how to setup an HMRC application via the Developer Hub, please refer to our documentation here: https://help.whmcs.com/m/payments/l/1364497-how-to-create-an-hmrc-application-for-uk-vat
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