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Report from Catherine Bearder Lib Dem MEP for the South East – VAT: success for small businesses!

by derekdeedman on 1 May, 2015


I am delighted to report the Commission has pledged to change online VAT rules which were causing havoc for small online traders.


Last month I wrote to you to say I’d written to the Commission President, Juncker, along with 32 fellow MEPs from 16 different countries to raise our concerns with new VAT rules that came in this year.

I welcomed constituents, Juliet McKenna and Clare Josa to the parliament who had raised their concerns with me that the new VAT rules would drive smaller online traders out of business.

The new rules, designed in 2008, require VAT for digital services to be paid in the country of the buyer rather than the seller. They were originally intended to prevent large companies from gaining a competitive advantage by basing themselves in countries with lower VAT rates.

Some of the rules were totally outdated and far too burdensome for many of the smaller sole traders which the online market has become a stomping ground for. They included, among other hings, keeping customer records for 10 years and providing proof of buyers’ locations.

I was pleased to be able to tell you that in a debate in the European Parliament the Commission has said they are willing to look carefully at the rules and lessen the burden for smaller businesses.

Now I am absolutely delighted to be able to tell you that the Commission is planning to propose a change to the rules next month, including potentially a single minimum sales threshold which will protect smaller businesses.

This is a real example of how when the UK gets stuck in and works with its allies we can see real action being taken at the top.


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