Too Little, Too Late? #EUVAT Offer From EU VP Andrus Ansip. It’s Time For YOU To Lobby YOUR Government.

Posted on by Clare Josa, Mentor To Passionate World-Changers
Is it too little, too late on EU VAT?

We are hugely grateful to the MEPs who succeeded in scheduling this evening’s debate on EU VAT in the European Parliament. However, we are also  disappointed in the EU Commission’s official response from VP Andrus Ansip, who is responsible for the Digital Single Market (DSM) and who represented Pierre Moscovici (the EU Commissioner responsible for Tax and the recipient of the EU VAT petition).

VP Ansip agreed that the new EU Digital VAT rules are posing a huge problem for SMEs and micro businesses. That is an amazing achievement. Thank you everyone.

He also reminded the European Parliament today that the EU Commission (which proposes the laws) suggested a threshold of €100k back in 2004 (this would make it best part of €140k now), but it was voted down by individual Member States’ Finance Ministers, which is why there is no threshold – and this is why your business is suffering.

He said that there will be a report ‘this summer’, after which they EU Commission will decide whether / when to make proposals to change the EU VAT legislation to remove the burden from the smallest businesses. In a separate statement this evening he said he envisaged proposing the legislation in 2016 – in addition to last week’s promise to extend the rules to apply to ALL online sales (i.e the stuff that is currently exempt) after 2016, by which point the DSM – and possibly your business – will be long-gone.

The problems with this?

Now don’t get us wrong, we’re not trying to be ungrateful, it’s just that:

  • VP Ansip knows that most of us cannot comply – it’s not just difficult. It’s impossible for most of the smallest businesses, without radical restructuring of our businesses and potential 5-figures in costs – all to collect peanuts for other EU Member States. He knows we’re being forced to drop digital goods or close our businesses. We have had meetings with his core advisers, so he cannot deny knowing this. Waiting until 2016 before the yawningly-slow legislative process even starts is a miserable prospect.
  • Yes, he is offering a potential threshold of €100k (about £71,000), and that is, in itself, incredible progress. But what are businesses above this threshold supposed to do? There is still no solution for them. The legislation is so complex that even a household name multi-billion turnover company got stressed about it (we have that off-the-record). Here’s a recent article on why a €100k threshold isn’t a magic fix-all.
  • He is still not suggesting any kind of simplification or reworking of the legislation for those above any threshold, to allow them to keep trading, (for example to allow just one piece of data as proof of place of supply for those below the official EU Audit threshold (2m).
  • The ‘report’ he mentions is, we believe, being created by a consultancy firm who attended a breakfast meeting, hosted by Vicky Ford MEP (thank you!), at which we delivered the Keynote speech in late March 2015. The primary representative from the consultancy firm refused to take our contact details and refused to work with us in any way on the report, despite us having interviewed nearly 2,500 micro businesses in our quantitative research study, EU-wide. So we have minimal faith in the output of his report. After all, it is ‘consultants’ who told the EU over the past 10+ years that no micro business would be affected by these new rules, because none of us sells direct to consumers or outside of our home country…
  • If VP Ansip hasn’t even decided when to propose the legislation, which could still take years to debate, then your business will be long-closed before the legislators and report-writers have consumed enough coffee to reach a recommendation.

Bottom line: VP Ansip and VP Timmermans have publicly admitted that this legislation has had devastating unintended consequences for the smallest businesses.

The EU is not acting in any way fast enough to keep you trading and the costs of compliance are vastly disproportionate to the amounts of EU VAT collected.

They have admitted they always assumed that micro biz wouldn’t be affected – it was never meant to hit you.

But they’re not planning to even start doing anything about it until next year.

But you can still make a difference!

Between us, we have given the EU plenty of time to get this sorted. Yes, it is brilliant that the MEPs and EU Commissioners now agree that the unintended consequences of this legislation are severe. They promised, back in March, to ‘urgently remove this burden from SMEs’. Unfortunately a 100k threshold with no reworking of the law above that point, and not even considering starting the slow legislative process until ‘after the summer’ doesn’t come close to fulfilling that promise.

So now it’s down to your national Government.

Each of us needs to lobby our Member State Government to immediately suspend this legislation for Microbusinesses (the EU definition is <€2m turnover), while the EU sorts out the mess it has created and those Microbusinesses go back to their domestic VAT laws. In the UK, for example, this would be called a ‘temporary Extra Statutory Concession’ and it could be implemented very quickly, if the government wants to keep small businesses trading.

Your government DOES have the power to do this – even if it might make it unpopular within the EU… But surely protecting the businesses who the EU admits have been accidentally hit hard by the unintended consequences of these ill-thought-out rules is more important than being told off by the Head Teacher?

We implore you to write to your MP (government representative) and your Finance Minister to explain how these new rules have hurt your business and to explain that you need an immediate suspension for micro businesses, to allow you to keep trading, while the EU figures out how to undo this mess.

Your government CAN save your business.

This article tells you how to get in touch with your national Finance Minister.

And for UK readers, here’s how to contact your MP.

We are happy to include links for other countries, if you could let us know them via the comments.

You are welcome to send them our interim impact assessment report that has been widely circulated within the European Parliament and Commission.

And you might want to ask your Finance Minister what the net revenues were that they received in April (Q1 of the legislation), after deducting the costs of collection and excluding the revenues from the big companies like Amazon. We strongly suspect these figures will be much lower than the Member States promised each other when they were getting excited about the juicy financial cherries this legislation would bring them.

Together we CAN make the difference that is so desperately needed. Even getting the EU to talk about thresholds is an astonishing achievement. Proving the negative consequences – unintended – of these rules is a done deal. So now we need to reclaim our power to convince our Governments that they need to take decisive action to help their own citizens.

Please let us know via the comments how you are able to support with this Action Challenge. Please share any useful contact details you come across via the comments, along with any replies you get. We are hugely grateful to you for all actions you take.

Thank you so much for your on-going support. Please join us over at the EU VAT Action Campaign Group on Facebook to stay up-to-date and to continue being part of the solution.

Clare & the EU VAT Action Team

Clare Josa, Mentor To Passionate World-Changers
Author of the Dare To Dream Bigger Entrepreneur’s Handbook.
 
>>> Contact The EU VAT Action Team <<<
http://www.daretodreambigger.biz/book

We Need Your Positive Thoughts & Vibes For Tonight’s MEP EUVAT Debate

Posted on by Clare Josa, Mentor To Passionate World-Changers

I know it might sound like a crazy idea, but please could you send us your positive vibes on the ‪#‎EUVAT‬ campaign this evening (Monday 7pm-ish UK time) and tomorrow morning (Tuesday).

Some amazing MEPs have managed to schedule 2 separate EU VAT debates for us and afterwards the EU Commission will make a statement, at which point we’ll know where we stand!

Please send your positive thoughts, your hopes, your prayers, your manifesting, your sparkling sprinkling of miracles. Together we can create shifts. Please share.

Thank you so much!

Will report back tomorrow – so watch this space.

Clare & the EU VAT Action Campaign Team xx

Clare Josa, Mentor To Passionate World-Changers
Author of the Dare To Dream Bigger Entrepreneur’s Handbook.
 
>>> Contact The EU VAT Action Team <<<
http://www.daretodreambigger.biz/book

Why The Hope For An EU VAT ‘Simple Tech Solution’ Has Become The Emperor’s New Clothes – And Time Is Running Out To Save Micro Businesses

Posted on by Clare Josa, Mentor To Passionate World-Changers
EU VAT Tech solution not the answer

One of the biggest barriers we have come up against on EU VAT over the past six months is everyone’s hope that a ‘simple tech solution’ will fix everything – and make this scary VATMESS go away. We have had politicians use it as an excuse for not asking the EU to suspend implementation. We have had financial journalists use it as an excuse for not covering the story. And even the UK’s Downing Street told us their ‘preferred option’ was that Tech City would save the day – many months ago – yet still there is no sign of a solution.

The problem with all this talk about tech

You know what it’s like when there’s something you really don’t want to have to do – that might be awkward, difficult or even embarrassing, and if someone offers you the suggestion of a future way round it, what are you likely to do? Yup. Sit and wait for the ‘future way round it’, clutching at those straws of promised hope, no matter how painful the present situation is.

That’s what is happening with talk of an EU VAT tech solution: the key decision-makers who need to find a way to get the disproportionate burden of this legislation lifted would much rather do nothing in the hope that the tech world will get them out of the hole, without them having to ask awkward questions and make requests of the EU decision-makers that could cause problems. Remember: each and every EU Member State agreed to this legislation and passed it to be used in their home country – so all of our politicians are jointly responsible.

Raising hopes of a ‘simple tech solution’ distracts from what is really needed

We shouldn’t be trying to sticky-plaster broken legislation with complex technology. We should fix the legislation first. Then the tech solution becomes much simpler and more robust.

The more we waste time focussing solely on technology (we’re not saying it couldn’t be PART of the fix), the harder it is to get the key decision-makers to talk about thresholds to remove the EU VAT burden from the smallest businesses – and simplifying the rules from the ground up to make them workable for larger businesses.

In other words, the more time we spend looking only at tech solutions, the longer it is going to take until your business is out of pain.

And another thing… Your ‘safety net’ is about to be removed.

Most businesses have managed to keep trading by geo-blocking (now an epidemic), by adding enough ‘human intervention’ to stay outside of the legislation or by dropping digital products.

However, these safety nets will soon disappear. EU Commission VP Andrus Ansip has officially announced that VATMOSS will be extended to all online sales (i.e. even those with more than minimal human intervention or that would currently be considered non-digital) and that he wants to prevent geo-blocking, perhaps as early as 2016.

So the need to reform this legislation and give a sensible threshold is more important than ever.

The challenges with a ‘simple tech solution’ approach:

Finding a solution that is partially compliant is easy – there are many of them out there. And we are HUGELY grateful to those who have developed them. And for SOME businesses they will suffice. However, we are not currently aware of any tech solution that is fully compliant and readily-available to small businesses, to work with all platforms, systems, shopping carts and business types.

And remember: the business is the one liable (and could be prosecuted by 27 other Member States) for the penalties if a tech solution misses a customer or makes a mistake, not the software creator.

One small business organisation even organised a ‘Hackathon’ to spend the evening finding a tech solution this week – again distracting people from the real issues with the hype of hope. We’re grateful to them for trying to find a solution, but realistically, if a tech solution were so incredibly simple it would surely have been created at some point over the past 8 years? Businesses are closing or shelving their digital product plans every day and we cannot afford to keep waiting, hoping for future tech answers.

And any future tech solution will only be as good as the brief given to the developers. Otherwise they are just wasting time and hope by creating yet another partially-compliant solution. Read on to find out how complex that brief would need to be…

George Palmer from SendOwl (an eCommerce platform for digital product sellers) says about creating a one-size-fits-all tech solution:

“It’s like trying to take an engine from one manufacturer and make it work in any car in the world. You’ve got different connections between the engine and vehicle, different bonnet sizes and the cars are designed for different things. So even if the engine works on its own, it’s of no use if you can’t put it into your car.

“It’s the same with an EU VAT plugin. It might well be able to work out the correct EU VAT rates on its own, but if you can’t plug it into your eCommerce system, it won’t help you.”

Rachel Andrew, a core member of the EU VAT Action team, and an international speaker in the technology world, reminds us:

If you build a bespoke solution for your business, as we did, then you can ignore any part of the requirements that don’t apply to you. For example we don’t need to worry about multiple VAT rates, we don’t sell anything that attracts a reduced VAT rate. We don’t have mixed physical and digital product sales. That meant we could cheerfully ignore writing the code to deal with multiple possible VAT rates and products at different VAT rates.

If you try and create something that is for all possible types of business, you have to fully comply with the entire legislation.

Therefore any general software solution must:

  • be fully compliant with the huge complexities of the legislation
    (we are not aware of any fully-compliant solution that doesn’t require hiring a programmer to integrate it or that integrates with the entry-level software systems used by most micro businesses)
  • work seamlessly with all website platforms, shopping carts, payment providers and membership systems
    (it is not reasonable to insist that a business change its entire website order processing system in order to comply with this legislation – that can cost hundreds of hours and many, many thousands of pounds to do and could close down a small business. There are potentially thousands of permutations of system components the software would need to interface with.)
  • be able to display the correct price to customers at all time, without forcing registration and login
    (that causes a massive drop in sales, even for repeat customers)
  • be able to handle the complex data processing required, without crashing shared hosting servers due to data loads
    (this has already happened and one micro business told us they had to spend £100,000 on a bespoke server to handle the additional data processing – even Amazon has struggled with this)
  • not add in any extra steps to the checkout process
    (this is proven to dramatically increase cart abandonment)
  • be able to reliably identify B2B customers
    (including checking VAT number validity) and handle them appropriately, including reverse-charging the VAT, without causing a drop-off in B2C sales
  • only include 1 piece of customer self-declared data
    (for example, on PayPal this counts as the customer’s account address, so an additional drop-down box for country would not be valid)
  • have a workable solution for when the customer location data is contradictory
    one which does NOT include refusing the transaction, because this angers the customer and damages the business’s reputation
  • be as simple to add to your website as a PayPal ‘buy now’ button
    allowing it to be installed by small business owners who do not have the back-up of a tech team and cannot afford a programmer
  • be as close as possible as free to use
    (it’s not fair, for example, for a business to have to pay a fee for all domestic and non–EU transactions, just in case they make a handful of non–domestic EU sales – one business incurred low-level €0.20 fees per transaction and ended up paying 10 times as much in fees as the EU VAT she collected). The cost of compliance must be reasonable and proportionate, given that many of the potential users are still selling mainly to a domestic market.
  • be able to handle the fact that even the EU Commission admits that IP addresses are unreliable
    (even the EU Commission reports accept they are max 90% accurate and consumers are regularly masking their IP address and even committing IP address fraud or browsing anonymously)
  • automatically update the correct rates of VAT
    in real-time, across the EU, to audit levels of accuracy
  • be able to figure out which rate of VAT to apply
    to each kind of product a person sells – and they may well be different for different products – in different countries (for example Italy has 2 different rates even for e-books, depending on whether they have an ISBN)
  • be able to handle multiple rates of VAT per transaction
    and even 2 countries of supply in a single transaction (both surprisingly common problems)
  • produce the correct data for VATMOSS reporting so that Member States don’t pursue businesses for rounding errors
    (as Sweden did to a UK business last week, over a <€5 error), including separating out B2B sales appropriately
  • produce the correct reporting format for VATMOSS returns
    so that businesses know their software figures won’t be different from their VATMOSS figures – this has been a major problem for many businesses so far, especially once you work in variations in currency exchange rates
  • produce the correct figures for a UK or other Member State domestic VAT return
    so that the business doesn’t have to do their VAT analysis twice
  • issue the correct format of VAT receipts to customers
    for the Member States that require them, in the correct language and currency
  • be able to handle the complexities of exchange rate variations between the rates required for Member State & VATMOSS reporting, vs the much less favourable rates used by credit card processors (and hence the actual amount received by the business).
    Sweden disputed a €4.60 discrepancy with a UK business this month, so the potential for a business to be pursued by all 27 Member States over rounding errors and currency exchange discrepancies is huge. This fear would stop many businesses from selling digitally, even if there were a tech solution.
  • be able to safely store the confidential customer data for 10 years
    in accordance with the data protection rules in each individual Member State
  • have full customer tech support (usually the most expensive part of offering a tech solution)
    so that low-tech businesses can easily figure out how to use it
  • be almost free to use
    even something as low as, say, a 20p fee per transaction mounts up if you’re only selling 99p downloads – and if you’re charged this even on domestic transactions (sometimes the case), then the cost to collect non-domestic EU VAT can massively out-weigh the actual VAT collected

This list may not be exhaustive, but it is a good start.

Can you imagine being a top developer and working incredibly hard to create a simple solution for something so hugely complex, and create the dedicated customer support functionality needed to help non-tech-aware businesses, only to be told that your customer businesses can’t afford to pay you more than peanuts for it?

Don’t get us wrong – we’re not anti any tech solution. It would be incredible if a simple, reliable, affordable and flexible tech answer were suddenly to become available. As a campaign team, we could crack open the Champagne and go back to actually seeing our children and being able to work on our own businesses again :-)

But it’s time to stop praising the Emperor’s New Clothes and using potential future tech miracles as an excuse for not taking action to protect micro businesses NOW. It’s time to agree that it is probably easier to reform the legislation than it would be to find a simple piece of technology that can handle something so massively complex.

What can you do to make a difference?

Again – it’s about writing to the decision-makers. And visiting them in person, if you can.

Our people-on-the-inside are telling us that we will only reach the urgently-needed tipping point by keeping the pressure on – even if we feel like we’re being boring and repetitive.

Please write to your Member of Parliament and your representatives in the European Parliament, reminding them how this legislation is hurting your business, and explaining that, for most of us, there is no simple tech solution, so we need the EU to immediately suspend this legislation for micro businesses, while the laws are renegotiated.

And please come and join us over at the friendly and helpful Facebook group: EU VAT Action Campaign Group

Thank you so much for your support – and please let us know via the comments which actions you will be taking to help keep this problem top-of-mind for the key decision-makers.

Thank you!
x Clare & the EU VAT Action Team

Clare Josa, Mentor To Passionate World-Changers
Author of the Dare To Dream Bigger Entrepreneur’s Handbook.
 
>>> Contact The EU VAT Action Team <<<
http://www.daretodreambigger.biz/book

Please Could You Help Us On Twitter Today? #EUVAT #DigitalSingleMarket

Posted on by Clare Josa, Mentor To Passionate World-Changers
Please take action to help us today

Following the brilliant news from the EU Council and First VP Timmermans on Wednesday that they will make sure there are no adverse impacts on micro businesses and entrepreneurs, due to the new EU VAT rules, we urgently need your help.

Timmermans was tasked by Juncker (EU President) to check out whether the EU VAT mess is real. But he still used the word “If” in his statement. “IF there are adverse effects…”

We need to help remove any doubts he has. We need to fill his Twitter inbox with evidence that this IS a genuine EU-wide problem.

And Martin Schulz, who is the President of the European Parliament, is clearly not convinced that this mess is real. I have just been watching the full debate from Wednesday (that took some coffee!) and his sarcastic comments about this being nothing but UK pre-election spin totally belittle the suffering of tens of thousands of micro businesses and show he doesn’t yet believe this is a genuine problem. Please tweet him, too. Especially any German businesses you know – if he can see this hurts home-grown businesses and not just the UK he’s more likely to listen.

PLEASE tweet both of them, using the hashtag #EUVAT, to tell them why it’s a problem for you. You might also like to link to the impact assessment report:

euvataction.org/report/

Here are their details:

Frans Timmermans
@TimmermansEU

Syed Kamall MEP has promised to organise an urgent meeting for us with Frans Timmermans, so maybe you could tweet Mr Timmermans to ask him to meet with us next week?

Martin Schulz
@MartinSchulz

Here are some sample tweets you might like to share:


 


 


 


 
And you might like to tweet the guys below to thank them for their support on #EUVAT and for raising this at the highest levels – it’s really important to show gratitude and give credit where it’s due:

@Ansip_EU – VP of EU Commission on DSM (He listens to the hashtags #DigitalSingleMarket and #DSM)

@SyedKamall

@GuyVerhofstadt

@VickyFord

@CatherineMEP (Catherine Bearder)

And finally:

A super-helpful insider told us on Wednesday that Donato Raponi (DG of VAT for the EU – no Twitter account) still isn’t convinced that this is a real problem, but that the way to convince him is via his boss – Pierre Moscovici (DG of Tax for the EU – @PierreMoscovici). So please send your tweets to him, too.

Let’s give them something life-changing to think about over the weekend.

Please tag us (where you have space!) & let us know via the comments here and at the campaign group, how you get on.

@euvataction
@clarejosa
@julietemckenna

Thank you!
EU VAT Action Team

Clare Josa, Mentor To Passionate World-Changers
Author of the Dare To Dream Bigger Entrepreneur’s Handbook.
 
>>> Contact The EU VAT Action Team <<<
http://www.daretodreambigger.biz/book

Vice President Timmermans Promises To Make Sure The Smallest Businesses Aren’t Hurt By The New #EUVAT Rules

Posted on by Clare Josa, Mentor To Passionate World-Changers
VP Timmermans Promises Support

While we were in the European Parliament yesterday, following excellent meetings with over 130 MEPs, EU Commission Staff and industry leaders, we saw that some of them were already keeping their promises. Syed Kamall MEP and former Belgian PM Guy Verhofstadt MEP raised the EU VAT mess during debates yesterday afternoon, on your behalf.

Your voice was heard.

This video extract of the EU Parliament debate includes Vice President Timmermans, whose responsibilities include the reduction in red tape, making clear statements that he will protect you from the damaging effects of the new EU Digital VAT rules. Indeed, Vice President Ansip (Digital Single Economy) discussed this at length in the most senior meeting possible yesterday morning.

Listen as VP Timmermans promises to make sure that you are not unfairly burdened by this legislation.

But also hear how he uses the word ‘IF’ – “IF there are adverse effects…” In other words, he still needs to see more evidence.

Guy Verfofstadt MEP (Belgium) says that the College (the VPs) intend to give an exception to all small businesses. This is BRILLIANT news, because it is the only sensible solution to this mess. But we still have to PROVE to them that ALL EU Member States are affected.

So PLEASE join in with this action challenge, to help keep the momentum going. VPs Timmermans and Ansip can’t change this without the support of your country’s Finance Minister. Please write to them to tell them to support the EU Commission in brining in an immediate suspension of the legislation for micro businesses, so that they can return to their domestic VAT rules and continue to trade.

Thank you all for your help.

This isn’t the end, but it is BRILLIANT progress, in no small part down to each and every one of you who has taken action so far.

Thank you.

See you in the EU VAT Action Facebook Group for a quiet celebration?

Clare Josa, Mentor To Passionate World-Changers
Author of the Dare To Dream Bigger Entrepreneur’s Handbook.
 
>>> Contact The EU VAT Action Team <<<
http://www.daretodreambigger.biz/book

Successful Meetings At EU Parliament on #EUVAT

Posted on by Clare Josa, Mentor To Passionate World-Changers
Meetings with MEPs at EU

Juliet McKenna and Clare Josa from EU VAT Action have been meeting on your behalf with key influencers in the European Parliament and EU Commission in Brussels for the past two days, to make your voice heard on the #EUVAT issues.

On Tuesday night, Clare gave a keynote speech to 90 MEPs, EU Commission Staff and EU-wide industry leaders. On Wednesday morning she presented at a breakfast meeting with 30 MEPs and their support staff, as well as EU industry associations.

Clare Josa, Juliet McKenna & Syed Kamall in #EUVAT meeting in Brussels European ParliamentThe MEPs we have met with include Syed Kamall, Vicky Ford, Catherine Bearder, Molly Scott Cato, as well as representatives from Germany, Holland, Croatia, the Czech Republic, Slovakia, Italy, Spain, France and the UK. Vice President Ansip’s office met with us last night and is meeting with us again today, and VP Ansip is raising this topic, on your behalf, during his College meeting on the Digital Single Economy this morning.

The overwhelming response has been positive, especially once people understand exactly how challenging, if not impossible, it is for micro businesses to comply with the complexities of the new EU VAT legislation on digital sales.

We have been helping those we have met to understand:

  • That this is an EU-wide issue, and not just the UK
  • That there is no ‘quick fix’ with technology – any tech solution would be hugely complex and the data processing alone could risk crashing shared servers
  • That businesses DO support the intention behind this legislation, but the administrative burden is disproportionate for smaller businesses
  • That the vast majority of micro businesses are using very simple payment processing systems that don’t give them the 2-3 pieces of audit data required to prove the customer’s location
  • That the administrative burden, compared to domestic VAT, is disproportionate
  • That businesses are closing daily – or ceasing to sell their digital products – because they cannot physically comply with the legislation
  • That almost one third of EU micro businesses are now using geo-blocking to prevent non-domestic EU sales, in order to keep trading, despite the new rules
  • That these unintended consequences were not foreseen, because it was assumed that micro businesses would not be affected.
  • That just because the EU Member States rejected Raponi’s suggestion of a threshold six years ago, it doesn’t mean they would now. Indeed, now we can prove the damage it is doing, it is in the interest of the MS Finance Ministers to take action and agree to lift this administrative burden from the smallest traders.

The positive responses are tempered with fears that all 28 EU Member States would need to agree any changes and that this could take a very long time.

We have been asking for an immediate suspension of the legislation for micro business (EU definition = <€2m turnover), for a finite period of time, whilst proper impact assessments are carried out, the legislation is reworked, and a permanent derogation is negotiated.

The EU could bring this in relatively quickly, but they DO still need support from all Member States.

Please could you help by writing to your Finance Minister / Treasury Secretary, to let them know specifically how the new rules are hurting your business, and please also attach a copy of the interim implementation study.

There is support here for you. They need to keep hearing how much of an issue this is for you, to give them the courage to take the massive action that is needed.

We have strong support from Vice President Ansip, who can see how this legislation is inadvertently damaging the Digital Single Economy. But Donato Raponi still believes this is a mainly UK problem.

More good news is that, in response to David Cameron’s statement last week, President Juncker has asked Mr. Timmermans to urgently investigate the issues with the new EU VAT rules and we hope to be able to meet with him, with Syed Kamall, very soon.

Thank you so much for your on-going support. Please join us over at the EU VAT Action Campaign Group on Facebook to stay up-to-date and join in being part of the solution.

Clare & Juliet

 

Clare Josa, Mentor To Passionate World-Changers
Author of the Dare To Dream Bigger Entrepreneur’s Handbook.
 
>>> Contact The EU VAT Action Team <<<
http://www.daretodreambigger.biz/book

British PM Taking The EU VAT Campaign To EU Chief & We Need Your Help

Posted on by Clare Josa, Mentor To Passionate World-Changers
David Cameron is taking the EU VAT Action Campaign to the President of the EU Commission

As you may know, we have been working closely with the British Government and the Prime Minister himself over the past few months, on your behalf. The Prime Minister was aware of the issues with the EU VAT rules, but discussions between him and the EU Commission had been kept behind closed doors.

Last night his office went public. As the British national newspapers are now reporting, the UK Prime Minister is now publicly challenging Jean-Claude Juncker (President of the European Commission) over the new EU VAT rules, asking for a threshold below which the domestic VAT rules would apply, thereby removing the crippling unintended burden from micro businesses.

This is HUGE news and massive progress for your campaign. For the PM to go public on this, it means he is taking big action. And it will encourage other Member States to follow suit.

And the PM is so supportive of the work you have been helping us to do that we were asked to submit a quote for the Downing Street press release that announced David Cameron’s decision. And this quote has been used widely in the national press today. Your voice is being heard.

In addition, we’re really excited to tell you that the interim analysis of the survey that so many of you have filled in is being officially circulated by Downing Street, as evidence of the hugely damaging unintended consequences of the legislation. So THANK YOU to each of you who has already filled it in.

(If you haven’t yet, we’re still collecting data – here’s where to find it).

And there’s more! Caroline Lucas, MP, has raised an official question for us in Parliament today and she has a second lined up. Again, it might sound like a small step, but this is actually really important in creating the mood for legislation change. Thank you Caroline!

We are meeting with senior officials from HMRC, HM Treasury and Downing Street again this afternoon, and we’ll report back after the meeting.

We are also travelling to Brussels next week, to present to MEPs and senior members of the EU Commission, to help them understand how urgently a suspension of this legislation for micro businesses is needed.

And we need your help!

For any changes to happen, each of the EU Member States needs to agree to them. And the people who need to agree are the Finance Ministers and their EU Fiscal Attaches.

Here’s how you can help: the interim report from the quantitative study makes compelling reading and really helps people to understand that this isn’t a whinge-fest, but a real and painful issue for small businesses.

We need EACH AND EVERY Finance Minister in the EU to read this report, and to get emails from their home-grown businesses, explaining how the unintended consequences of this legislation are damaging them.

Therefore:

 

    • The list of Finance Ministers for each country and their email addresses is at the bottom of this post.

 

  • Please then let us know via the comments that you have done it – and let us know which country you are in.

It doesn’t matter if your country has already been covered – just imagine the impact that getting 100 / 200 / 5000 emails with this report could have THIS WEEK, on the back of this massive wave of publicity from the media! The time to make your voice heard by your own government is NOW!

Then join us over at our friendly and informative Facebook group: EU VAT Action Campaign Group. We would love to see you there.

And above all, thank you for your support, your determined hope and your positivity. Without your help, we wouldn’t have achieved what we have achieved so far. There’s still a long way to go. But today’s news is a truly vital step on that journey.

Thank you!
With love, and gratitude,
Clare & the EU VAT Action Team

For political & media enquiries, please call +44 7437 905 435

EU Finance Ministers

Austria

Hans Jörg Schelling,
Alternate contact: (Assistants)
Twitter: @HJSchelling

Belgium

Johan Van Overtveldt,
Alternate contact: (Policy questions email (via http://financien.belgium.be/nl/Minister/)
Twitter: @jvanovertveldt

Bulgaria

Kalin Hristov,
Alternate contact: (Central email address)

Croatia

Boris Lalovac,

Cyprus

Harris Georgiades, No direct email found
Alternate contact: http://www.mof.gov.cy/mof/mof.nsf/page05_en/page05_en?OpenDocument (Web form)
Twitter: @Georgiades_H

Czech Republic

Andrej Babis,
Twitter: @AndrejBabis

Denmark

Bjarne Corydon,

Estonia

Maris Lauri,
Alternate contact: (Chancellor)
Twitter: @MarisLauri

Finland

Antti Rinne,
Twitter: @AnttiRinnepj

France

Michel Sapin, No direct email found
Alternate contact: (Frederic Glanois: Deputy Head of Office of Ministry of Finance)
Twitter: @Min_Finances (His own account exists but isn’t used)

Germany

Wolfgang Schäuble,
Alternate contact: (Sekretariat)
Twitter: @Wolf_Schauble

Greece

Yanis Varoufakis,
Twitter: @yanisvaroufakis

Hungary

Mihály Varga,
Alternate contact: (Customer service email)
Twitter: @Varga_Mihaly

Ireland

Michael Noonan,

Italy

Pier Carlo Padoan,
Twitter: @PCPadoan

Latvia

Jānis Reirs,

Lithuania

Rimantas Šadžius,

Luxembourg

Pierre Gramegna,
Twitter: @MinFinLux

Malta

Edward Scicluna,
Twitter: @edward_scicluna

Netherlands

Eric Wiebes, No direct email found
Alternate contact: https://www.rijksoverheid.nl/contact/contactformulier (General web form)

Poland

Mateusz Szczurek, No direct email found
Alternate contact: (Central email address)

Portugal

Maria Luís Albuquerque,

Romania

TBC, TBC

Slovakia

Peter Kažimír,
Twitter: @KazimirPeter

Slovenia

Dušan Mramor,

Spain

Luis de Guindos,

Sweden

Magdalena Andersson,
Alternate contact: http://www.gov.se/pub/road/Classic/article/117/jsp/Render.jsp?a=247188&m=popup&l=en (Webform, via Senior Registary Clerk)

United Kingdom

George Osborne,

 

Clare Josa, Mentor To Passionate World-Changers
Author of the Dare To Dream Bigger Entrepreneur’s Handbook.
 
>>> Contact The EU VAT Action Team <<<
http://www.daretodreambigger.biz/book

We Took Your Voice To #10 – And Here’s How You Can Help The Campaign

Posted on by Clare Josa, Mentor To Passionate World-Changers
EU VAT Action Takes Your Voice To Downing Street

On February 17th, Juliet McKenna and Clare Josa from the EU VAT Action Team met with Daniel Korski, Special Adviser to the UK Prime Minister, and Kirsty Bell, a member of his Policy Team.

We want to say a huge THANK YOU to each of you who has written to your MP and MEPs, who has tweeted, who has visited your MP, who has managed to get local and national press coverage. We are pleased to say that, as a result of everyone’s efforts, the UK government IS now aware of the severity of the problems the new EU Digital VAT rules are causing and they are working hard to find solutions.

We took the Prime Minister’s Special Adviser through the interim analysis of the EU VAT impact survey, to help them see how profound the problems are, as well as walking him through the huge problems that the legislation is causing for you.

They had been previously fed the line that ‘3rd party platforms’ are a reasonable solution, so we helped them see how unreasonable it is to force a business to move from selling direct to having to trade through a 3rd party platform, losing up to two thirds of their revenue, just to be able to stay in business. Here’s an example for how authors are impacted by no longer being able to sell direct via their website. And we also helped them to understand that, for many businesses, third party platforms simply aren’t an option.

The government is also fully expecting technology solutions, combined with help from payment processors, to fix the problems. Alas this is a line they have been fed by a prominent pro-tech lobbying group. And, because it’s what they want to hear (who wants to have to admit that you completely forgot to consider the implications on micro businesses because the EU-wide assumption was that none of us exports and none of us sell direct through our websites…), it’s easy for them to put their faith in tech solutions.

However, the brilliant news is that we now have formal input to these tech solution meetings – so we can help to make sure that:

  1. they actually ARE compliant and
  2. they don’t require a PhD in computer programming for us to implement and
  3. the data processing load at checkout doesn’t cause shared-server-hosting to crash and
  4. the don’t cost any more than the current PayPal / Stripe fees. That’s a really tall order (or the cost of compliance is disproportionate).

However, these solutions are sticky plasters over the enormous cracks in this legislation. They miss the point that the administrative burden of this legislation is disproportionate, compared to the amount of non-domestic EU VAT that most of us will be collecting.

We are pushing hard for as high a threshold as possible, to release the smallest businesses from this legislation. But we need your help on this, or the need for a threshold could be masked by the hopes for tech solutions.

As a result of the campaign work, UK officials are now working in Europe to raise awareness at the EU Commission of the difficulties these new regulations have created. In yesterday’s meeting, as in previous high-level meetings with HMRC and HM Treasury, we discussed short, medium and longer term strategies to achieve different solutions as well as ways in which the EU VAT Action campaign – that’s everyone, including you, not just the core team – can help create momentum in Brussels in favour of change.

 

The Big Problem: Other EU Member States and the EU Commission are still insisting that this is a UK-only problem – because that is where most of the noise is coming from.

The immediate priority is to increase broader European awareness, both among governments and small businesses, of the problems they’ve got coming their way. So those European digital traders and entrepreneurs who are already aware of the issue need to contact their Finance Ministers and Tax authorities, to complain long and loud about the ways these new regulations are damaging their business.

Although we have compelling quantitative survey data and hundreds of EU-wide case studies, what has the most impact is a country’s Finance Minister receiving, say, 100 complaints directly from home-grown businesses, explaining how the legislation is hurting them, disproportionately.

We all know that the unintended consequences of this legislation are severe. We all need to convince the 28 EU Member States’ Finance Ministers that this is the case.

We need to present as much solid evidence as we can to key European Commission policy makers, as soon as we can, to reach the tipping point which will see action. That means alerting the thousands upon thousands of European businesses who are still unaware of this mess, so they can complain to their authorities and also so they can complete our survey and clarify the country-by-country picture that’s emerging (and it’s really not pretty…)

We’re investigating ways to contact European freelancer and small business associations as well as ways to get the story into the European press. The No.10 Policy Unit has offered to facilitate our efforts wherever possible on this.

In the meantime, we have an Action Challenge for you.

We need to get a big noise out in non-UK Europe. Fast.

The new EU Digital VAT implementation will be reviewed as part of the Single Digital Economy work in April this year, at the heart of the EU Commission. BEFORE that happens, we need to convince the key negotiators that the new EUVAT rules are a big enough problem that they need urgent fixing.

We need you to continue to do all you can through your own business and personal connections to spread the word and to convince your European friends and colleagues to speak up. It’s in everyone’s interests, after all!

So please comment below – to let us know how you can help and to share any ideas for how we could get more noise in the media, EU-wide and then please join us in our Facebook group: EU VAT Action Campaign Group

Thank you SO MUCH for your on-going support.

Clare Josa & Juliet McKenna & the EU VAT Action Team

Clare Josa, Mentor To Passionate World-Changers
Author of the Dare To Dream Bigger Entrepreneur’s Handbook.
 
>>> Contact The EU VAT Action Team <<<
http://www.daretodreambigger.biz/book

The New EU Digital VAT Rules: What’s The REAL Cost Of Compliance?

Posted on by Clare Josa, Mentor To Passionate World-Changers

As part of our negotiations with international governments and the EU Commission, we need to collect as much evidence as possible on what it is costing micro businesses, to try to comply with the new EU VAT rules that came in on January 1st 2015.

The unintended consequences of this legislation on micro businesses and sole traders is enormous – and we need to put numbers in front of key politicians and Decision-Makers to help them understand that this is REAL and not just a whinge-fest.

We’re talking about quantifiable costs in terms of:

  • Time to develop solutions
  • Up-front costs of tech solutions
  • Time & costs to redesign websites and shopping carts
  • Upgrading website hosting or servers, to handle the data processing burden
  • Costs per sale of any solution / moving to a 3rd party platform
  • Administrative hours to manage the process, on-going
  • Ceasing trading to non-domestic EU – loss of sales
  • Having to offer digital products for free – or scrapping them entirely
  • Worst case – ceasing trading completely

And also intangible costs in terms of:

  • Delayed / scrapped launches
  • Stress
  • Opportunity costs
  • Reputation loss if no longer selling direct

Here’s a simple example – of the costs of a non-VAT-registered independent author who has to move to selling e-books via Amazon, instead of direct to their readers via their own website (click to see the image full-size):

The cost of an independent author moving to a 3rd party platform, to comply with EU Digital VAT rules

An author selling a £9.99 e-book drops from an income of £9.64 per sale to £5.83 per sale, losing 40% of the former revenue, if they have to sell via a 3rd party platform (which charges 30% commission and covers the payment processing fees). The author also effectively loses their UK VAT threshold, because the 3rd party platform IS VAT registered, so must charge UK VAT to domestic consumers.

In the case of a platform charging 65% (e.g. on Amazon at £10+ sales), they are left with just £2.92 per sale, even if they never make a single sale outside of their home Member State. So the cost of complying with the legislation, in that case, becomes a 70% cut in income.

Amazon uses this higher commission figure to try to force authors to sell at lower prices. Also Amazon restricts which countries you can sell in, so authors are no longer able to sell worldwide, which is a massive cost of implementing the new Digital VAT rules. Additionally, Amazon and Apple customers also experience persistent problems with purchasing books whilst travelling, which has a negative impact on the author’s reputation.

If they don’t sell via a 3rd party platform, then most cannot continue to trade, because the costs, complexity of compliance and administrative burden far outweigh anything that is reasonable on low-priced products.

It is easy to see that the cost of compliance in this case is disproportionate.

We want to collect hundreds more cases like this.

If you have experienced costs in complying with the legislation, please could you urgently let us know. Either tell us via the comments, or let us know in this discussion thread in our super-friendly and super-helpful Facebook group.

Thank you so much for your help!

Clare & the EU VAT Action Team

Clare Josa, Mentor To Passionate World-Changers
Author of the Dare To Dream Bigger Entrepreneur’s Handbook.
 
>>> Contact The EU VAT Action Team <<<
http://www.daretodreambigger.biz/book

Time For An Action Challenge For EU VAT – You Might Enjoy This One – Come And Join In!

Posted on by Clare Josa, Mentor To Passionate World-Changers
EU VAT Action Challenge - 21st January 2015

Here is a fun – and potentially campaign-changing – action challenge for you – the video is only 2 minutes long and tells you all you need to know:

What to say when you visit them?

  • You might want to talk them through the briefing document (below), to dispel some of the myths, misunderstandings and fob-offs that have been flying around.

    •  

  • Explain to them how, specifically, the legislation is a problem for you and your business – and perhaps present examples from your friends, too. Be real and give them evidence.

    •  

  • If it feels right for you, ask them to insist that your government immediately suspends implementation of the legislation for micro businesses (defined as €2 million or below), whilst they lobby Pierre Moscovici at the EU Commission to exempt micro businesses completely. These micro businesses would then revert to their home country’s VAT rules.

And here is the pdf download for the briefing, in case you want to take something with you:

EU VAT Action One-Pager

You can view it online by clicking the link, or you can right click and choose ‘save as’ (or similar) to download it.

Let us know how you get on. This is your chance to make a real difference.

Thank you so much for being part of the team!

Clare & the EU VAT Action Team

Clare Josa, Mentor To Passionate World-Changers
Author of the Dare To Dream Bigger Entrepreneur’s Handbook.
 
>>> Contact The EU VAT Action Team <<<
http://www.daretodreambigger.biz/book