Juliet and I had a meeting today with our key contacts at the UK’s HM Treasury. These are the people who have been negotiating the long-needed EU VAT changes on your our behalf. Last week we dispelled the top 10 EU VAT myths, with regards to what might happen after the referendum. Today we have the facts – as far as they are available.

Here’s an update for you on what is likely to be happening with EU VAT, following the UK’s EU referendum result.

The implications don’t just affect the UK – they affect micro businesses across the world.

In case videos aren’t your thing, here’s a summary of the key points:

• The UK is still in the EU and has the same rights and obligations as before, so EU Digital VAT continues to apply, worldwide, as before.
• The EU Commission still intends to propose the promised legislation for a threshold and a simplified ‘soft landing’ area above that threshold, by the end of this year. This is a huge achievement, since a year ago they did not believe there was a need for either of these.
• Another major achievement is confirmation that the Commissioner proposing the Digital Single Market legislation WILL include a provision to permit geoblocking for the purposes of reducing legitimate administrative burden, such as EU Digital VAT
• The UK will continue to have a voice in the EU Digital VAT negotiations, whilst the UK is in the EU. However, once Article 50 is invoked and the formal leaving process has started, other Member States may choose to give less weight to our opinion
• This is an issue because the UK has been the most vocal country over the new EU Digital VAT rules. So it is more important than ever for micro businesses outside of the UK to make sure their Finance Ministers, Members of Parliament and Members of the European Parliament are fully aware of the challenges you face with these rules. We are happy to help you get creative in making your voice heard, if traditional routes aren’t yet working for you. (See Action Challenge, below)
• Whatever the outcome of the UK’s EU negotiations, the OECD (Organisation for Economic Cooperation and Development) trend is for more countries to implement similar place of supply rules to those from January 1st 2015 in the EU. This means that you need to keep taking actions to upgrade your business systems, so that you can prove where your customers are located.
  Whilst the OECD recognises the need for thresholds and simplifications for the smallest businesses, it is imperative that we keep up the pressure on our shopping cart providers and payment processors, to supply us with the data that we need, to be able to comply.
• The VATMOSS system in the UK will remain in operation for the duration of our negotiations. What will happen to it after that, no one knows. But please don’t make major business decisions based on guesswork, at this stage.
• Next steps: we will continue to give you a voice within the UK government and the wider EU. The campaign has already achieved recognition in Whitehall, Brussels and at the OECD. Together, we have achieved the breakthrough that these decision-makers now understand that micro businesses – especially the smallest that are running on a laptop from a kitchen table – must be considered when changing legislation.

None of this could have been done without your support and the actions of the thousands who have supported the campaign. Thank you.

And here is the action we need you to take, please:

And we need your support now, more than ever. We have been asked to put together a technical paper for the OECD Working Party on VAT, summarising the specific technical challenges that micro businesses have faced with complying with this legislation, over the past 18 months. So:

Please write to your Finance Minister, MEPs, Member of Parliament and copy to us (euvat @ clarejosa . com) to tell them:

• Specifically why you cannot comply with the EU Digital VAT rules – or why it is difficult for you

This will help to keep your problems top-of-mind, despite the background noise, and it will encourage Finance Ministers to vote to support the threshold and ‘soft landing’ legislation, when it is proposed.

And please make sure you come and join us at our super-helpful Facebook group: EU VAT Action Campaign Group

And if you found this update helpful, please share it on social media – especially in any business groups you’re part of. It’s essential that people are well-informed on this.

Thank you!

Clare, Juliet & the EU VAT Action Team