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Bread and butter

October 9, 2018

The hopelessness, it gets to you.

You look at the world, at politics, economics, climate change, and you think, it’s all so big and so hopeless and so utterly, utterly fucked that there’s just no point in anything…

Nevertheless. Insert platitudinous inspirational meme here. We can’t go on. We go on.

Anyway. Did you know we have a Minister for Small Business? Well, actually a Parliamentary Under Secretary of State, Minister for Small Business, Consumers and Corporate Responsibility? It’s Kelly Tolhurst MP and she’s only been in post since July of this year, so I suppose we must let her off.

Because small businesses are being screwed. Again. Well, not small businesses, as such, but micro businesses. You know, the ones who aren’t represented by the CBI or the FSB, the ones which barely have a need for an accountant let alone someone to read policy documents for them and represent them at HMRC “Stakeholder” groups.

In the beginning there was administrative burden, which is the cost of dealing with the government – not the money the government takes from you in taxes etc, but the money it costs you to comply with the regulations they make like filling in the necessary forms to tell them how much tax you’re going to have to pay. And the UK had the highest VAT threshold in the EU because that took bazillions of micro businesses out of VAT and cut the administrative burden by gazillions.

Then there was Amazon, who hoovered up the business of selling ebooks and they did it from a low-VAT-on-ebooks jurisdiction. So the EU introduced rules to make the VAT chargeable where the buyer was located, not the seller, and in solving one problem they created another, because there were a load of authors who sold their ebooks directly from their own websites rather than paying a substantial proportion of the turnover to Amazon or another platform.

Because those authors (and the knitters selling patterns and the musicians selling sheet music and the trainers selling online courses…) weren’t represented by any “stakeholder” group and because neither HMRC not the EU did due diligence on the impact on micro businesses, no-one realised they were literally unable to comply with the legislation as originally envisaged, well, they were fucked.

Fair play to the micro businesses of Great Britain, though, because they got together and lobbied their little hearts out and crowdfunded to go to Ecofin in Dublin and lobbied the EU and… won. There’s a €10,000 Euro turnover threshold below which the new rules won’t apply, so Amazon and the like are hit but the one-woman kitchen-table business isn’t. Result?

So you might think.

The legislation comes into force on 1 January 2019. Unless something happens, the UK leaves the EU on 29th March 2019. The micro businesses of Britain have a whole 87 days to trade legally and friction free.

After that? Not only do they not get the concessionary treatment for micro businesses and the simplified system for small businesses, they don’t even get the “benefit” of being able to transact via the VATMOSS system with the protection of HMRC between them and the other EU fiscs. They become “non-union” traders and are expected to work out the rate of VAT applying in the location of their customer at the exchange rate on the day of the transaction…

It’s rubbish, and (according to the campaign group) the British government haven’t even asked for relief, or for a continuation of the de minimis threshold, after Brexit.

Oh, and there’s talk of lowering the VAT registration threshold. Because the one thing we need from Brexit is more red tape and administrative burden, right?  I mean, right?

Dear Kelly Tolhurst MP, can you please remember the very smallest businesses and look at the VATMOSS mess?

I can’t even. It’s worse than the music hall. The circus. The music hall.

 

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