Conservative MEPs welcome microbusiness exemption from "VATmoss" rules

11-Sep-2015 @ 14:00

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 Conservative MEPs have welcomed confirmation that the European Commission is to bring in an exemption from EU VAT rules for microbusinesses.    

The so-called VATmoss system, which came into effect at the start of this year, means that businesses have to collect VAT for each individual country they sell to, and keep the records of all their transactions for years.

The extra burden has forced many tiny digital entrepreneurs, such as sellers of e-books or even knitting patterns, to stop trading.

After lobbying from Conservative MEPs, as well as from Prime Minister David Cameron, the European Commission has confirmed that it will propose a threshold beneath which companies will be exempt, although the exact figure is still to be established.

East of England MEP and chair of the Internal Market Committee Vicky Ford, who leads the Conservatives' campaign on the digital single market said:

"Digital entrepreneurs are the lifeblood of economic recovery and these rules are having a devastating impact.

"This outdated law means that tiny companies are facing crippling costs leading many to stop selling altogether.

"If Europe is to prosper then we need to make sure that the EU's single market is fit for purpose for the digital age."

Meanwhile London MEP Syed Kamall commented: "VATmoss is a typical piece of EU law that had understandable intentions but brings with it burdensome unintended consequences.

"I've been working with many small businesses over several months to seek a solution and I'm glad the European Commission has agreed on the need for an exemption."

Kay Swinburne, the Conservatives' Economic Affairs Spokesman in the European Parliament added: "This is a very welcome step, but we now need urgent agreement from finance ministers to ensure these changes are introduced at the earliest possible opportunity.

"If the European Commission is serious about cutting red tape it needs to do all it can to support small businesses"

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