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If you want to understand the vigour with which the UK Government has shot businesses in the foot with the VAT changes, look at the distance selling EU VAT thresholds... All set at €35,000+.
By contrast, the new UK law has NO MINIMUM. https://www.avalara.com/vatlive/en/eu-vat-rules/distance-selling/distance-selling-eu-vat-thresholds.html
By contrast, the new UK law has NO MINIMUM. https://www.avalara.com/vatlive/en/eu-vat-rules/distance-selling/distance-selling-eu-vat-thresholds.html
That's right. Even the smallest EU micro-business is expected to register with HMRC, collect 20% VAT from UK customers, file VAT returns with HMRC, remit the VAT periodically to HMRC, and keep all records for 6 years.
Or, you know, not sell to them... https://www.gov.uk/government/publications/changes-to-vat-treatment-of-overseas-goods-sold-to-customers-from-1-january-2021/changes-to-vat-treatment-of-overseas-goods-sold-to-customers-from-1-january-2021
Or, you know, not sell to them... https://www.gov.uk/government/publications/changes-to-vat-treatment-of-overseas-goods-sold-to-customers-from-1-january-2021/changes-to-vat-treatment-of-overseas-goods-sold-to-customers-from-1-january-2021
And the changes don't only apply to EU businesses. Oh, no, that wouldn't be nearly destructive enough!
No, any business anywhere in the world wishing to sell to UK consumers will have to face the same red tape hurricane.
No, any business anywhere in the world wishing to sell to UK consumers will have to face the same red tape hurricane.
Added bonus for greater destruction: the ÂŁ15 minimum has been axed. Now VAT is payable on consignments of any value.
So EU businesses have taken a triple hit:
- Brexit red tape (customs, etc.)
- New VAT rules
- Loss of ÂŁ15 exemption
And non-EU businesses suffer the latter two.
So EU businesses have taken a triple hit:
- Brexit red tape (customs, etc.)
- New VAT rules
- Loss of ÂŁ15 exemption
And non-EU businesses suffer the latter two.
NOTE
1. The EU is bringing in similar rules in July 2021 (we copied from them, not the other way around!)
2. EU rules will have a €10,000 threshold for EU firms, but none for non-EU firms (i.e. UK ones etc.)
3. A single EU VAT registration covers 27 countries.
1. The EU is bringing in similar rules in July 2021 (we copied from them, not the other way around!)
2. EU rules will have a €10,000 threshold for EU firms, but none for non-EU firms (i.e. UK ones etc.)
3. A single EU VAT registration covers 27 countries.
So their version of the new system will make things EASIER for EU firms compared to now.
It will make things HARDER for non-EU firms to sell into the EU, just as ours has for non-UK firms selling to us.
We're on the wrong side of the wall, since we're not an EU member any more!
It will make things HARDER for non-EU firms to sell into the EU, just as ours has for non-UK firms selling to us.
We're on the wrong side of the wall, since we're not an EU member any more!
This is my *interpretation* of what happened, but...
The UK had input on the planning for the EU's big change. (This hasn't happened overnight.)
Then Brexit reared its ugly head. But the Tory wreckers decided to pinch the whole thing anyway, not realising that it only harms us.
The UK had input on the planning for the EU's big change. (This hasn't happened overnight.)
Then Brexit reared its ugly head. But the Tory wreckers decided to pinch the whole thing anyway, not realising that it only harms us.
Why might they have done so?
Desperation.
By outsourcing VAT collecting to everyone else, they've "cleverly" reduced the burden on HMRC at a time when it is reeling from the onslaught of Brexit red tape.
In doing so, they've stuffed thousands of businesses.
Desperation.
By outsourcing VAT collecting to everyone else, they've "cleverly" reduced the burden on HMRC at a time when it is reeling from the onslaught of Brexit red tape.
In doing so, they've stuffed thousands of businesses.
It takes a very particular kind of genius to line up three calamities in parallel:
- Pandemic
- Brexit
- Problematic VAT changes (+ÂŁ15 threshold elimination bonus)
- Pandemic
- Brexit
- Problematic VAT changes (+ÂŁ15 threshold elimination bonus)
If you think all this is hypothetical, take a look at all these examples (170+ now) of firms that have had to change their business model or stop selling to the UK/EU because of Brexit. Many also cite the VAT change as a factor. https://twitter.com/uk_domain_names/status/1345765584349356033?s=20
