SMEs take #vatmoss concerns to HMRC
The small businesses met with representatives of HMRC, and also Financial Secretary to the Treasury David Gauke yesterday, at the Enterprise Nation office in Somerset House. They explained exactly what the new requirement to charge VAT based on the buyer’s location for digital goods in the EU, regardless of the £81k threshold, would mean for them.
You can bone up on #vatmoss here. But in short, it will mean a massive and unnecessary admin burden for SMEs that’s totally out of proportion to their activities. The new rules will affect people who sell anything from music downloads, ebooks, knitting patterns and apps.
The group raised four main points with the minister:
– A de minimis level where businesses under £81K turnover are exempt from paying VAT on purchases
– A re-consideration of the data provision element of the legislation that would otherwise require micro-firms to retrieve and keep hold of sensitive data for ten years on their home laptops
– A consideration of the burden of VAT compliance placed on small platforms and marketplaces. Many are run by micro firms themselves and couldn’t comply with the burden.
– A clearer explanation of the digital products that will be affected – such as e-books, knitting patterns, music, artwork, photos, how-to-guides
This is a good bit of lobbying from Emma Jones and her team and it seems that there is some optimism that these new rules could be reformed. Although this is unlikely before 1st January. We’ll keep you posted on progress.
I really hope they get this sorted. I sell digital products, although I don’t make a lot of money, I’m self employed but have yet to reach the normal tax threshold. Every year I’ve done a little better, and working on my own I can only do so much. This would put a lot of people out of business.
I’ve signed a petition, not sure if it will make any difference, but it’s here: https://www.change.org/p/vince-cable-mp-uphold-the-vat-exemption-threshold-for-businesses-supplying-digital-products