Wednesday 27 May 2015

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.


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 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 .

Friday 22 May 2015

Hilary Clinton championing small businesses in her USA presidential bid

Who would have thought I could get to speak to Hilary Clinton on EU VAT? :) 

Well not actually SPEAK... but Hilary has joined LinkedIn as part of her presidential campaign, as she wants to connect with small businesses in the USA.

And she has written her first post today outlining how she wants to make the burden of tax and admin easier for small businesses, and so I have added a reply pointing out the detrimental effect that the EU VAT rules are having on American businesses trying to sell into Europe.

If anyone else on LinkedIn wants to add comments to the post it strikes me as a good way to raise the issue's profile in the USA.

Tuesday 19 May 2015

Once again the #EU Commission proves it does not care about small biz!

Once again the ‪#‎EU‬ Commission has let small businesses down. Once more the ‪#‎VATMESS‬ that is ‪#‎VATMOSS‬ looks set to destroy all cross-border sales for small businesses.
Today the #EU Commission had the chance to prove it cares about low-turnover businesses as well as the global conglomerates and once again it has failed to do so, despite the best efforts of a number of supportive MEPs.
#EU Commission, I and others are disgusted with you.
If you cannot help us stay in business, we have no business staying in the #EU.

Saturday 16 May 2015

How the new #EU #VAT rules are hurting buyers!

The new #EU #VAT cross-border digital sales rules don't just affect sellers, they hit buyers too, as if we have to charge VAT you have to pay more when you buy from us! That's no fun, is it?!

But it's even less fun when you realise that these rules are going to be extended to cover sales of anything that goes from one EU country to another, or from one non-EU country into the EU. Are you listening yet America? Canada? Australia? New Zealand? Japan? China? Rest of the world?

Low-turnover businesses have been covered by their home country's VAT threshold until 31.12.2014, and still are for sales they make within their home country, but get caught up in the VAT rules when they sell outside their home country, even if the item is a penny!

OK so what will happen if those digital sellers at the low-turnover end of the marketplace stop selling online? Will it affect you? You may think not, but you'd be so wrong!

Do you buy music from indie bands?
Do you buy apps for your smartphone?
Do you buy games or modifications for games for your computer?
Do you buy software?
Do you buy patterns for your knitting, crochet, craftwork?
Do you buy images for use in your projects?
Do you buy ringtones for your mobile phone?
Do you subscribe to a specialist digital magazine?
Do you buy ebooks from indie authors?
Do you undertake online courses to learn a new skill or hobby?

If you said yes to any of those questions then you are affected by this issue.

Juliet McKenna of the EU VAT Action team has been looking into the issue, after the team undertook a survey of more than 2,000 small traders whoc supply exactly the sorts of digital products I listed above. Her findings are worrying. Here is what she says,
If there’s a big company behind your chosen product, they’ll probably be able to cope. It’ll be a hassle for them, no doubt about it, but they have the resources.
If that business is run by just one person, working on their own? Then it’s unlikely they’ll be able to handle the new rules. Just how many of those resources come under the heading of “automated digital services”. In other words, they’re all now subject to the new rules requiring whoever’s offering them to charge the correct VAT rate where you live.
The administrative burden of trying to figure out, with up to 3 pieces of information, where your customer is and the choosing the correct rate from the EU’s 81 options is enormous. Most small businesses do not have the means to do this.
The people who create these amazing resources, unless they’re a big business with tech support, are more likely to close or to block your country than to be able to comply with the new EU VAT rules.  Here is the link to the full article.
Ahhhh, you say, but I don't buy things I get mine for free...  maybe you do, but not for much longer!  Your "free" product is actually paid for by the advertising revenue that is made by the site from which it is sold, or via ads within the product itself (those ads you see in apps are a prime example).  That advertising revenue now comes under the EU VAT rules so the seller has to register for VAT, and has to account for the VAT on the revenue and pay it to the relevant tax authority.  So what?! you might say... well here's what...  that all takes time to do, it costs money to do, as managing VAT returns means higher accountant's fees, it means registering as a data controller, and a host of other hassles that go with it and take up your time - and as we all know, time = money in a business! 

So, if you believe in a free marketplace where you can buy your digital products you really do need to take notice of what's happening with the EU VAT rules.  The answer is not to pull out of the EU, but rather to shout loudly to your MEPs that the EU has got it wrong. If enough of us shout they might listen.  If we don't shout, then we will all just be shopping for the same old things at Amazon and eBay in the future!

Friday 15 May 2015

Are the #EU #VAT rules discriminating against low turnover businesses in the marketplace?

Juliet McKenna of the EU VAT Action Campaign say they are discriminatory, not just against small businesses, but also against people who are unable to be in paid work for a host of reasons. Juliet says,
New digital technologies and business opportunities are proving invaluable for those working from home for a whole range of reasons. People who specifically benefit from being able to work at home include those with autism, agoraphobia, depression, social anxiety, long-term physical illnesses, and mobility issues. Such people can and do run successful businesses because they’re able to work on their own terms and for the hours that suit them, using IT and the internet. Many are otherwise unable to work.
The EU claims it is anti-discrimination yet here we have its own rules which are discriminating against a significant sector of the population. The only way for the EU to achieve its aim of a free market place and a truly level playing field for businesses is to remove the barriers it has put in place that are causing the suffering and demise of so many low-turnover businesses.

Even not-for-profit ventures such as the planned Science Fiction Foundation's Terry Pratchett ebook has fallen victim to the problem of #VATMOSS. As Juliet says,
Any small charity wishing to publish specialist books for a target audience will find themselves in the same position, with the same unpalatable choices.
The EU was never intended to cause such havoc, nor to put in place so many obstacles to free trade. The time has come for the EU to accept that it is failing in what it tried to achieve and rescind the existing rules for low-turnover businesses whilst there are still some of them trading that can be saved.

The alternative is truly scary: all online sales will only be via 3rd party marketplaces such as Amazon, eBay, Folksy, ETSY, etc... and many of the choices offered by independent sellers will have gone for good!

Juliet's article may be read in full 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!

Thursday 14 May 2015

You can't hack the #EU #VAT problem with a grand in an afternoon!

Tech solutions are not the way to deal with poorly thought out #EU #VAT rules on cross-border sales that are hurting low turnover businesses. #vatmoss is still a #vatmess and is coming to all cross-border sales soon, not just digital as now.

Don't think that this isn't your problem, as if you sell anything outside of the UK it will be your problem soon. Even if you are currently below the UK VAT registration threshold. There will be NO THRESHOLD on cross-border sales unless we fight for one now!

Read the latest article on the ongoing #VATMOSS is a #VATMESS saga on the EU VAT ACTION web site, " Why The Hope For An EU VAT ‘Simple Tech Solution’ Has Become The Emperor’s New Clothes – And Time Is Running Out To Save Micro Businesses"

Wednesday 13 May 2015

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!

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,