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.”
Lord Howard Leigh of Hurley discusses the government’s initiatives to mitigate tax avoidance and evasion
Top 50+50: Demand for tax advisory services remains high, but fee pressure is expected in relation to compliance services
The demand for tax advisory services remains high and this looks to continue; but fee pressure is expected in relation to compliance services as the “Making Tax Digital” initiative is rolled out,
While some resistance to change is to be expected, the degree of controversy surrounding HMRC's Making Tax Digital proposals has surprised the government
Kevin Reed discusses the worrying findings from HMRC on micro-businesses' problems handling Real-Time Information, and the latest thoughts on how accountants can provide value-added services