Enterprise Nation published a report this week criticising HMRC for its handling and communication of changes to European VAT legislation implemented in January, especially of the mini one-stop shop (MOSS). The EU VAT taxation report says that in 2013 a HMRC investigation put the figure of non-VAT registered firms likely to be affected at 5,000. However, at the Department for Business, Innovation and Skills (BIS), government figures put the number closer to 350,000, but that information did not inform HMRC research; and HMRC did little to raise awareness of the changes in the marketplace until just weeks before implementation.
Emma Jones, founder of Enterprise Nation, said: ‘The EU VAT regulations caused havoc in the digital small business community. If details of the new charges and reporting responsibilities had been communicated earlier, we’re sure there could not only have been more opportunity to make amendments to the bill, but that an entrepreneurial solution to the problem could have been developed. As it was, not even the marketplaces themselves had prepared new software or worked out the finances.’
Jordan Marshall, policy and external affairs adviser at the Association of Independent Professionals and the Self Employed (IPSE), said: ‘A shocking lack of joined-up thinking from government appears to be at the root of the problem … HMRC’s calculations were way wide of the mark, but, even worse, it ignored analysis by BIS that has proved far more accurate and could have helped the sector better prepare. These businesses are among the most flexible and innovative and at a time when productivity in the UK is stalling, HMRC should be doing all it can to enable these microbusinesses to prosper. Moving forward, we urgently need to exempt our smallest businesses from the crippling compliance cost of this regulation.’
Between 2006 and 2014 the European e-commerce market nearly tripled, growing from €106bn in 2006 to €317.9bn in 2014. This increase was facilitated by a constantly growing amount of internet users (up by 22%) and e-buyers across Europe.
Enterprise Nation published a report this week criticising HMRC for its handling and communication of changes to European VAT legislation implemented in January, especially of the mini one-stop shop (MOSS). The EU VAT taxation report says that in 2013 a HMRC investigation put the figure of non-VAT registered firms likely to be affected at 5,000. However, at the Department for Business, Innovation and Skills (BIS), government figures put the number closer to 350,000, but that information did not inform HMRC research; and HMRC did little to raise awareness of the changes in the marketplace until just weeks before implementation.
Emma Jones, founder of Enterprise Nation, said: ‘The EU VAT regulations caused havoc in the digital small business community. If details of the new charges and reporting responsibilities had been communicated earlier, we’re sure there could not only have been more opportunity to make amendments to the bill, but that an entrepreneurial solution to the problem could have been developed. As it was, not even the marketplaces themselves had prepared new software or worked out the finances.’
Jordan Marshall, policy and external affairs adviser at the Association of Independent Professionals and the Self Employed (IPSE), said: ‘A shocking lack of joined-up thinking from government appears to be at the root of the problem … HMRC’s calculations were way wide of the mark, but, even worse, it ignored analysis by BIS that has proved far more accurate and could have helped the sector better prepare. These businesses are among the most flexible and innovative and at a time when productivity in the UK is stalling, HMRC should be doing all it can to enable these microbusinesses to prosper. Moving forward, we urgently need to exempt our smallest businesses from the crippling compliance cost of this regulation.’
Between 2006 and 2014 the European e-commerce market nearly tripled, growing from €106bn in 2006 to €317.9bn in 2014. This increase was facilitated by a constantly growing amount of internet users (up by 22%) and e-buyers across Europe.
