The EC has published proposals to standardise VAT returns across all EU Member States. Under the draft legislation, any business with an annual turnover of more than €2m will be required to submit and pay their VAT returns on a monthly basis.
The EC has published proposals to standardise VAT returns across all EU Member States. Under the draft legislation, any business with an annual turnover of more than €2m will be required to submit and pay their VAT returns on a monthly basis. The tax authorities in each Member State will have to agree the purpose of the EU standardised VAT return, agree to its design and content, and ultimately introduce it in each Member State by 1 January 2017. The proposals are designed to reduce red tape for businesses, but advisers have warned the legislation could actually increase administrative and financial costs for thousands of UK medium-sized corporates.
Tom Kivlehan, VAT partner at BDO, said: ‘The Commission deserves credit for recognising that it has an important role to play in simplifying the administration of VAT throughout the EU, but its current proposals are likely to do more harm than good ... Unless the draft legislation is amended, tens of thousands of UK businesses will have to file or pay their VAT returns more frequently. How can these proposals be of benefit to companies that are already overwhelmed by red tape and having to battle to manage their cashflow?’ David Wilson, associate director at Baker Tilly, noted that ‘the current UK VAT return contains 9 boxes but, the proposals from the EU could see this increase to 26 boxes (which will, with limited exceptions, require to be filed monthly) without any scrutiny or debate in the UK Parliament.’
The EC has published proposals to standardise VAT returns across all EU Member States. Under the draft legislation, any business with an annual turnover of more than €2m will be required to submit and pay their VAT returns on a monthly basis.
The EC has published proposals to standardise VAT returns across all EU Member States. Under the draft legislation, any business with an annual turnover of more than €2m will be required to submit and pay their VAT returns on a monthly basis. The tax authorities in each Member State will have to agree the purpose of the EU standardised VAT return, agree to its design and content, and ultimately introduce it in each Member State by 1 January 2017. The proposals are designed to reduce red tape for businesses, but advisers have warned the legislation could actually increase administrative and financial costs for thousands of UK medium-sized corporates.
Tom Kivlehan, VAT partner at BDO, said: ‘The Commission deserves credit for recognising that it has an important role to play in simplifying the administration of VAT throughout the EU, but its current proposals are likely to do more harm than good ... Unless the draft legislation is amended, tens of thousands of UK businesses will have to file or pay their VAT returns more frequently. How can these proposals be of benefit to companies that are already overwhelmed by red tape and having to battle to manage their cashflow?’ David Wilson, associate director at Baker Tilly, noted that ‘the current UK VAT return contains 9 boxes but, the proposals from the EU could see this increase to 26 boxes (which will, with limited exceptions, require to be filed monthly) without any scrutiny or debate in the UK Parliament.’
