“But Mr. Dent, the plans have been available in the local planning office for the last nine months.”
“Oh yes, well as soon as I heard I went straight round to see them, yesterday afternoon. You hadn’t exactly gone out of your way to call attention to them had you? I mean like actually telling anybody or anything.”
“But the plans were on display…”
“On display? I eventually had to go down to the cellar to find them.”
“That’s the display department.”
“With a torch.”
“Ah, well the lights had probably gone.”
“So had the stairs.”
“But look, you found the notice didn’t you?”
“Yes,” said Arthur, “yes I did. It was on display in the bottom of a locked filing cabinet stuck in a disused lavatory with a sign on the door saying Beware of the Leopard.”
(The Hitch-Hiker’s Guide to the Galaxy)
New EU tax rules that come into force on 1 January could kill thousands of mini and micro online businesses.
The new VAT rules have been on the cards for six years and are ostensibly aimed at preventing big companies (yes, we mean you, Amazon, Apple and Starbucks) from claiming that all their European profit is made in Luxembourg (or similar tax havens) where they benefit from paying hardly any tax.
To this end, online businesses will have to pay tax in the country of the consumer buying the goods, not the business. The side effect of this seems to be that many small businesses will find themselves having to unravel miles of red tape associated with complying with 28 different VAT regimes.
The Government (whether it’s the EU, HMG, or the Ham-on-Rye Parish Council matters not; it’s The Government) estimated that about 4,000 British businesses would be affected. It’s turning out to be more like 250,000, some of whom have only found out about it this month. It’s unclear at this stage whether HMRC’s publicity department is housed in the basement or not.
Because make no mistake about it: this isn’t some minor adjustment that businesses who’ve been conscientious about their tax affairs would be expected to have heard of. The majority who’ll be caught out have never been registered for VAT before, and are dealing with such tiny amounts that the cost of compliance will vastly outweigh their income. If you charge anything at all for digital downloads, from January 1st you’re liable for VAT. The UK’s turnover threshold for VAT doesn’t, for some reason (presumably because you’re also paying directly to 27 other régimes), apply.
To be fair, there is a system – you gotta have a system – for “simplifying” the process, but even that is proving to be more trouble than it’ll be worth for some of these miniscule “businesses”. Which won’t bother Amazon or Apple in the slightest. Yet again, government regulation hammers the small players and leaves the intended victims practically unscathed.
(I’ll gloss over the fact that in discussions over internet sales tax exemption in the US, someone always pops up to tell everyone how much easier it would be if they had VAT instead like those enlightened Yoorpeans.)
Still, on the upside, that’s another quarter of a million recruited to oppose the EU.