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Small business relief at proposed VATMOSS threshold

SMALL BUSINESSES and sole traders have expressed their relief after proposals to introduce a threshold at which businesses must comply with VAT Mini One Stop Shop (VATMOSS) requirements.

The current arrangements are rather burdensome for small businesses, which see companies trading e-services with EU countries obliged charge VAT at the native rate of the customer. Many small businesses struggle to operate several different rates.

However, the European Commission stated it intends to introduce a threshold to exempt the smallest businesses from the rules at a meeting in Dublin.

Chris Bryce, chief executive of Association of Independent Professionals and the Self-Employed (IPSE), said the introduction of VATMOSS was designed to tackle tax avoidance from large multinationals – but has led to the unintended consequence of making life “far more difficult for our smallest businesses”.

He added: “We don’t want entrepreneurs to be discouraged from selling their services online for fear of having to deal with unnecessary red tape. We are therefore pleased the commission has taken on board our calls for an exemption for smaller businesses with a modest turnover, many of which are sole traders.

“Sadly it could be a long time before improvements to VATMOSS pass through the European Parliament. The commission should now consider what interim measures can be taken to reduce the burden on businesses that in all likelihood will be exempted in future.”

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