We need an Emergency Interim EU VAT Suspension from UK Gov't!

At last week's EU meetings it was made very clear that there would be no immediate help coming from the EU for low-turnover businesses being hit by the new EU VAT rules on cross-border digital sales.

Despite accepting that there has been unfortunate and unforeseen consequences for low-turnover businesses, and that something needs to be done to put things right, the EU mandarins have said it is not going to be considered until the end of the Summer, 2015, at the soonest, and no action will be forthcoming until 2016 at the very earliest.

FOR MANY BUSINESSES THAT IS SIMPLY TOO LATE!

Already businesses are struggling and failing to comply with the evidence requirements for cross-border sales. Add another year to the mix and many more will have closed their doors or stopped digital sales totally.

We have been told that there is something that the UK government can do to help, but we need YOUR help to make it happen.

It is called an Emergency Interim EU VAT Suspension, which basically means the UK government agree to suspend the new rules until such a time that the EU gets its act in order and provides a permanent fix for the mess it has made for micro-businesses.

What we need is for everyone to write to their own MP - you can use this site https://www.writetothem.com/ to contact them by email if it is easier than emailing them directly - and ask your MP to demand an Emergency Interim EU VAT Suspension on behalf of the thousands of small UK businesses that are suffering under this scheme.

Also, if you are a member of a Trade Association, please ask that they lobby the government for the same suspension. The EU VAT Action campaign has this to say about who to lobby and how,

If you are a member of any kind of trade of business association, please write to their Chair today to ask them to support the call for an immediate interim ESC to remove the burden of these rules from micro businesses. Please ask them to contact:

• PM David Cameron
• David Gauke (Financial Secretary to the Treasury, who would have to propose this legislation)
• and Jim Harra (HMRC Director General of Business Tax, who would need to propose this to David Gauke).

Please copy your request to your MP and ask them also to lobby David Cameron, David Gauke and Jim Harra.

Please also ask your industry body to contact any colleagues they have in other industry organisations and trade bodies, to urge them to do the same.

The more people who raise the issue with their MPs the better the chance we have of getting the Emergency Interim EU VAT Suspension, so please do this and help the thousands of us who are struggling to comply with the unintended consequences of this unfortunate EU legislation.

More details can also be found on the EU VAT Action website here .

Are the #EU listening to low-turnover businesses? Possibly!

I've feeling more hopeful tonight than I have been in months since I discovered the idiocy that is #EU #VAT #VATMOSS. This is where sellers of digital products within or into the EU have been required, since 1st Jan 2015, to register, charge and account to HMRC or another EU member state, the VAT on cross-border sales, even when the seller is below the VAT registration threshold in their own country, and thus not liable for VAT on domestic sales.

Tonight I have watched a video posted by Julia Reda, who is an MEP from Germany, who asked Digital Commissioner and EU Commission VP Andrus Ansip if help would be forthcoming for the businesses that are being damaged by the scheme, and if the EU would consider introducing a threshold below which cross-border sales would be exempt.  Julia suggested a turnover level of €100,000 pa.

Commissioner Ansip appears to agree with her!

It is now up to the EU's meetings, which are scheduled for next week (Mon & Tues) to decide to support or oppose the proposal.  Initially this was seen as being a problem which only affected us Brits, but thanks to the sterling work done by the EU VAT ACTION Campaign over the last 6 months, it is now clear that it is affecting people throughout Europe and beyond. That is a consequence that the EU certainly had not anticipated!

The video is well-worth watching!

EU VAT needs a sensible threshold, here's why...

How much help would a €100,000 EU digital VAT threshold actually offer? Juliet McKenna explains what the costs are of compliance with the EU VAT regulations for digital sellers, why a threshold is needed and why it needs to be at a sensible level!

http://euvataction.org/2015/05/11/how-much-help-would-a-e100000-eu-digital-vat-threshold-actually-offer/

EU VAT action is STILL on our menus!

The EU VAT issue for digital small/micro/nano businesses has not gone away.  Juliet McKenna explains why 3rd party marketplaces are not the answer and why low turnover businesses need the support of a sensible cross-border VAT threshhold, to allow them to survive and grow, and compete with the big-boys on a level playing field,

http://euvataction.org/2015/05/13/eu-vat-and-third-party-marketplace-myths/

How level is a level playing field? Internet giants v. sole traders

One of the things I have noticed during the last few weeks, from the number of people who have written to their MP raising the issue of the new EU VAT rules on cross-border digital product sales, is that all seem to be getting a pretty much standard template letter back. The letter states that the changes are good for the UK and will help provide a level playing field for businesses within Europe.

That, you might think, is a GOOD THING, and I'd agree, except that it isn't true!  Let me put it another way: "How does a sole trader whose cross-border sales may total a few hundred pounds a year effectively compete with an internet giant?"

Let me explain...   

Sole trader: 
Before the change... works from home, does accounts on own computer using spreadsheet software and files an annual self employed tax return. Has a website built using either an open source or a commercial install-it-yourself website/shopping cart and uses PayPal as a payment handler. Dead simple, easy to manage.

After the change... works from home, does accounts on own computer using spreadsheet software and files an annual self employed tax return. Has a website built using either an open source or a commercial install-it-yourself website/shopping cart and uses PayPal as a payment handler.Has had to register for VAT MOSS to account for VAT on cross-border sales. Has had to figure out if his/her existing website/shopping cart software can handle the new requirements of determining which country a potential buyer is from by producing 2 pieces of evidence from the list of those acceptable and displaying the price including the relevant VAT rate for the potential buyer's country, and then input all the details required to show 75 different rates of VAT covering the 28 countries of the EU, and then keep all the transaction data safe for a minimum 10 years from the date of sale.  Not so easy now is it?

Internet giant: 
Before the change... employs a whole army of people to provide a 3rd party marketplace sales platform, employs accountants and tax advisors to ensure they are using the system to their best advantage and are compliant with the requirements. Has the financial resources to provide a complex system for establishing the location of the buyer, calculating and charging VAT on sales based on that location, and to handle all the accounting for and payment of said VAT to each EU country afterwards. Has the resources to ensure the safe and secure retention of the sales data for the required minimum of 10 years.

After the change...  employs a whole army of people to provide a 3rd party marketplace sales platform, employs accountants and tax advisors to ensure they are using the system to their best advantage and are compliant with the requirements. Has the financial resources to provide a complex system for establishing the location of the buyer, calculating and charging VAT on sales based on that location, and to handle all the accounting for and payment of said VAT to each EU country afterwards. Has the resources to ensure the safe and secure retention of the sales data for the required minimum of 10 years. Did you see any difference?

How is that a level playing field???