- Education and Science
New VAT law: the six-month grace-period will finish soon
A new European policy, voted in the 1st of January, 2015, is menacing some e-commerce business (others will benefit, that's the hope). Consumer Vat is to be charged according to consumer's country legislation. This reverse the previous and still in use, in which favourable countries allowed small e commerce businesses to have just one added rate; ex. United Kingdom, 20% charged, no charge under a certain sales volume (81000 pounds a year).
It's time for e-commerce to charge the local VAT of the customer's country
Analysing the reasons of this new E.U. measure, there are few doubts it responds to logic. Simply a consumer has to pay the rate his government decided. In these previous years, e-commerce businesses, when carried on in countries with a favourable legislation, have been significantly advantaged. Free market would require, especially in an evolved field, equality in opportunity for the suppliers. In this terms it's easy to understand reason why Bruxelles chosen to implement this policy.
VAT added rate charged
As the EU managed to give six month of "grace period", June, this present month, is the last one with the old policy to be valid. That means, no charge for UK business under 81000 pounds of sales volume. There is no doubt some of those will close. Moreover for those small business over this sales volume, administrative costs will rise since the calculation on Vat charging is now much more complex; and many of these enterprises will require an accurate accountancy. A strong movement against this measure started a petition asking for the old regulation to remain. Even if this is asked just for sole entrepreneurs and small companies. According to the Guardian, that sponsored the movement at its start, there are no news about a turn in E.U. decisions.