Hey – remember when VATMOSS came in and everyone was running around screaming that the sky was falling? Remember how we explained that it wasn’t quite as bad as all that, but was still going to cause a lot of small business headaches? Well, it turns out the story’s not over yet. Read on for more exciting twists and turns as the VAT MOSS saga lumbers forward…
For those still catching up, VAT MOSS first reared its confusing head in January 2015. Hardly anyone really understood it, and those who did didn’t like it. The basics of it were that:
The point of the scheme, from HMRC’s perspective, was to stop large businesses from routing all their sales through low-VAT countries to pay less tax. Looking at it from the point of view of small businesses, though, it was a huge kick in the teeth. The big firms it was supposed to target took a moderate hit as expected, but to the micro business end of the spectrum it was far worse – and it looked like no one in power cared.
Almost 2 years of campaigning, anxiety and ugliness later, it’s beginning to look like some progress is finally being made. At the start of December, an announcement came that a “common sense” threshold was coming. Here’s how it works in practice:
There are several other procedural improvements and simplifications on the way as well, but those are the main headlines for now. No, it’s not the total obliteration of the scheme that many were (and still are) hoping for. It is, however, definitely progress – and a sign that HMRC is finally remembering that not everyone is a giant business trying to cheat the tax system. Small businesses are punching well above their weight in contributing to the UK economy, so it’s about time they were recognised – even if only grudgingly.
As to when all of this kicks in, we’re probably looking as far ahead as 2018. Until then, campaigners are keeping the pressure on to make sure it all goes through. There’s still the scary thought of VAT MOSS being extended to physical goods on the horizon, so this is no time to slow down.
Got VAT MOSS questions, grab a phone or keyboard and get talking to RIFT. We’ll walk you through what the upcoming changes will mean for your business, and show you how to weather the storm until then. Most importantly, remember that you’re not alone. These reforms have taken thousands of angry businesses to push through – so keep on kicking, never stop screaming and check back for more Voices from the RIFT.