Update on the #VATMESS

There has been action on the VAT issue in Brussels this week. As per this post on the EU VAT Action blog, Commissioner Ansip has finally admitted that there is a very serious problem here, and that something needs to be done.

Unfortunately, this being the EU, doing something is likely to take many months. Indeed, they might not even start the process until next year. (And let’s not forget that next January all cross-border trading will come within the new VAT rules, so all of you folks out there selling jewelry, soap, art objects and so on will be caught by them.)

So they agree that we need a threshold of at least €100,000, which would be more than sufficient to get all of Wizard’s Tower up and running again, but nothing is likely to happen until next year. I think you can guess how frustrating this is.

Another frustrating aspect of the whole affair is that it is becoming clear that much of the problem in the UK is our government’s over-zealous implementation of the new regulations. This is not a new phenomenon. Successive UK governments have had a habit of picking on particularly poor pieces of EU legislation and then going overboard on implementation so as to make the EU look bad. My guess is that their attitude now will be that there’s no need to do anything because by this time next year the UK will have left the EU and will no longer have to comply with EU laws. However, as I have discussed before, the regulations do, in theory, apply to the entire world.

What we would like the UK government to do is unilaterally opt out immediately. I have heard rumors that some EU countries have quietly advised micro-businesses that they don’t need to register. I can’t see us doing that, if only because it would be a tacit admission that there are lots of other EU regulations that we could have implemented less enthusiastically. What the UK government can to is implement what is called an Extra Statutory Concession. This would be an actual piece of legislation. It is something that may be worth writing to MPs, or to Treasury, about. The EU VAT Action post has suggestions as to how to go about that.

Sadly my expectation is that nothing will be done, because the current government doesn’t want people being self-employed.

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2 Responses to Update on the #VATMESS

  1. I disagree; I think this government quite like self-employment when it’s an alternative to being signed on… I also think a whole lot of EU regulations will suddenly get less overzealously overenforced in a number of areas, because Cameron, at least, is a Europhile, though it’ll be interesting to see how much of his party (and Cabinet) he can drag along. Whether that applies to this case, we can but hope.

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