26th March 2015
Ashley Fox, Conservative MEP for the South West of England & Gibraltar, has welcomed an assurance from a leading EU Commissioner over the party's campaign to ensure new VAT rules do not have an adverse impact on micro-enterprises.
Frans Timmermans, effectively President Jean-Claude Juncker's number two in the Commission, promised that the new rules would be examined to head off any harm to small digital companies through unintended consequences.
The so-called VATmoss rules mean that, from January 1st this year, businesses have had to collect VAT for each individual country they sell to, and keep the records of all their transactions.
The rules were brought in to stop big companies from abusing international tax rules, but unfortunately lawmakers did not foresee the emergence of digital micro-businesses, such as the sellers of e-books.
Conservative MEPs - backed by Prime Minister David Cameron - have been lobbying the Commission to introduce a threshold, to ensure the new rules do not create extra burdens for micro-enterprises.
The Commission initially sought to blame national governments, however responding in a debate to Conservative concerns, Commission vice-president Frans Timmermans promised to evaluate the effects of the new rules, saying "We would never want this legislation to have adverse effects on small entrepreneurs who are often at the cutting edge of creating new employment".
Mr Fox commented "I think we finally have a glimmer of hope for the many small businesses who have been so badly affected by this rule change. The current rules will hurt our small digital business sector, with more regulation, red tape and taxation.”
“If we want companies to grow, employ more staff and stimulate the economy then they need help. Previously the UK Government had provided support to this sector by making the first £81,000 VAT free, rather than condemning the British attitude of seeking to nurture small business and help them grow the Commission should be copying our example.”