Ive received this email this morning from our local MEP, dont know if it helps you or just puts you into more confusion: Dear Julie Read, With regard to your email regarding the payment of VAT on digital services and the new changes that are coming into effect on 1 January 2015, I completely understand why the introduction of these new changes is causing so much concern to micro businesses and individual online traders. European Parliamentarians have the bulk of their work concentrated within specific committees, mine being International Trade and Human Rights. All UK Labour MEPs are members of the European Parliamentary Labour Party, and prior to debate and voting we exchange information and discuss priorities. My colleagues Catherine Stihler MEP and Anneliese Dodds MEP are members of the Internal Market and Consumer Protection (IMCO) and Economic and Monetary Affairs (ECON) Committees that have responsible for scrutinising this piece of legislation. They have spoken to the UK government, to HMRC, to the European Commission, to the Federation of Small Businesses, consumer organisations and others to fully understand the problem and answer your concerns fully. After having made clear to the UK government and HMRC in particular your concerns, Labour MEPs have been able to confirm a number of things aimed to alleviate them: • You will not need to become familiar with the individual tax regimes of all 28 EU Member States. The whole purpose of HMRCs one stop shop is to make life as easy as possible for small businesses and individual traders. If you continue to trade as you do now, then you can submit your sales figures to the one stop shop and it will calculate your VAT and present you with a single figure, in pounds sterling. • You will not need a VAT number in order to use the one stop shop. I know that a number of businesses and traders have been concerned that they will need to register for a UK VAT number in order to use the one stop shop. I have spoken to HMRC and can confirm that this is not the case. Instead, you will simply be given a one stop shop registration number in order to use that service. • You will not have to pay VAT on your UK sales. If you are below the existing UK threshold of £81,000 of sales in a year, then you are currently exempt from registering for and paying VAT in the UK. That exemption will remain for UK sales, even if you sell in other Member States. So while you will have to use the one stop shop and pay VAT on your European sales, your protection from VAT registration and payment in the UK remains. • You will have until 20 April 2015 to make your first returns. Although the new EU law comes into effect on 1 January 2015, you have the first quarter of the year in order to make your returns to HMRC via the one stop shop. The one stop shop has been open for registrations since October, and you can continue to register into the new year. • If you trade through an online platform, like the App Store, then you will not need to register. If you do trade through such a platform, it is worth checking whether or not you need to register. A significant number of them will calculate the VAT for you, and you wont need to do anything. HMRC will be on hand to answer your questions. HMRC has put a significant amount of information on its website here: https://gov.uk/government/publications/vat-supplying-digital-services-and-the-vat-mini-one-stop-shop/vat-supplying-digital-services-and-the-vat-mini-one-stop-shop. You can also contact them via their Twitter account @HMRCcustomers, where they have recently held a Twitter surgery to help with peoples questions and concerns. This is an important change at an EU level to make the tax system fairer, and to ensure that large companies do not have a major advantage over small businesses and individual traders like yourself by simply moving to wherever the tax regime in the EU suits them best. This kind of fairness in our tax system is something that Labour has been fighting for in Europe for a long time. I appreciate that these kind of changes can bring major upheaval to smaller businesses and individual traders who do not have the systems in place to adapt easily to new regulations, unlike the bigger companies. This is why Labour MEPs have taken your concerns seriously and made clear to the UK government and others that they must do more to address your concerns. The Financial Secretary met representatives of micro businesses on December 3 to address their concerns, which does seem to be rather a late response as the new rules are due to come into effect in January 2015. I can assure you that the Labour delegation will continue to put pressure on the UK government and HRMC to make sure that they do not downplay the seriousness of these issues and to push for them to provide clearer guidelines and help to those who will be directly affected by the new rules. The HMRC and the UK government have been asked to provide Labour MEPs with more detail on some related issues that we have been asked about, and will give you an update on these as soon as we have heard back. Yours David DAVID MARTIN MEP Labour MEP for Scotland
Posted on: Mon, 08 Dec 2014 11:54:53 +0000
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