Cameron takes #vatmoss fight to Brussels

British Prime Minister David Cameron will be raising the issue of VAT MOSS with the president of the European Commission during meetings organised as part of the European Council.

New EU VAT rules that can into force at the start of the year mean that businesses selling digital products will have to pay VAT at the prevailing rate of the buyer’s location not that of the seller. Additionally, for such sellers, there will be no £81k threshold as there is for other traders. The new regulations also require onerous and (frankly) really rather needless record keeping.

Clara Josa of the EU VAT Action group says of the new rules: “The new EU VAT legislation brings corporate levels of regulation and administration not just to the boardrooms, but also to the kitchen tables of sole traders. Thousands of the smallest EU businesses cannot physically comply with the data requirements and the costs of compliance are hugely damaging.”

A British official at the summit said: “It’s a classic example of where the EU needs to be flexible and fast-moving, coming up with a fix before EU red tape has a detrimental effect on traders across Europe. It is one of the things the Prime Minister has found when he has been out and about across the country talking to businesses. He has had it directly raised with him.”

Let’s hope that the PM is successful. In particular reintroducing the threshold below which VAT isn’t payable is particularly vital.