Cameron the Big VAT Liar

A smaller story in a couple of papers on Tuesday about an alleged victory for Dave over European VAT regulations, but it’s more spin than substance I’m afraid.


The problems with the new EU VAT regs have been known for a long time, articles appeared in the press last year;

  • Guardian – New EU VAT regulations could threaten micro-businesses
  • Telegraph – How the EU is throttling online business with idiotic VAT reform
  • Mail – UK’s army of start-up firms protest over new European VAT rules aimed at curbing tax dodging by web giants

UKIP voted against the regulation when it was brought before the European Parliament.

These regulations have been in place since the beginning of 2015.

If Dave was so against the plan why didn’t he stop it in the first place?  Why didn’t he instruct his MEPs to oppose it – not that it would have stopped the regulations being passed of course?

Why wait until thousands of UK eCommerce businesses have been impacted, lost money or closed down?

If you read the article more fully, you’ll see that far from scrapping the plan, all the EU have agreed to do is re-evaluate the rules and consult on;

“restoring a VAT threshold to help start-ups, extending a single registration scheme for cross-border taxes, and allowing businesses to be audited for VAT only by their home countries.”

Note the next line that says;

“The commission said it had originally favoured a threshold, but this was rejected by national governments when the rules were first introduced”

So what chance that these national governments will change their minds now?

This is another example of the fact that a ‘one-size-fits-all-of-Europe’ approach doesn’t work. Each Country in Europe has different tax raising schemes with different rates/ thresholds/ allowances etc. and it is impossible to find a common solution without impacting some people very badly.

Pierre Moscovici, the EU’s tax commissioner, said;

“This consultation presents a real opportunity to ensure that future VAT revenues from the digital economy are distributed fairly and effectively”

Then why the hell didn’t they do that in the first place? Passing effective laws is their job isn’t it?  This law has only been in place since the start of the year for goodness sake, and people were shouting long before then about the problems it would cause.

Reading further you’ll see that various pressure groups have also been involved, and yet Dave seems to be trying to take the credit.

Clare Josa, of EU VAT Action, the campaign group behind the reform, said the measure was

“fantastic” but warned it could take two to five years for any new legislation to come into effect.

Another problem of EU membership – things don’t change very quickly.

How many entrepreneurs and companies are going to miss out or worse, go bust, waiting for Brussels to produce something useful. Outside of the EU we can re-take control of our own VAT regulations and changes can be made much more quickly if the need arises.

Not mentioned in the article at all, there are also two petitions set up by Change.Org (which I urge you to sign) that have been running for a year now to pressure the government into challenging this regulation. The first one garnered 23,000 signatures before being revised and re-launched, it currently has over 18,500 signatures.

The pro-EU camp will use this story as proof that we can influence EU decision making, but most people would acknowledge that what has been achieved so far is next to nothing and if it takes 2 to 5 years to put right it will certainly be too late for some.

The obvious point here surely is that outside the EU we wouldn’t have been forced to implement this nonsensical legislation in the first place and our entrepreneurs would have been in a much stronger position to compete and offer services across Europe.

Oh – and by the way, Britain contributes nearly 20% of the EU’s VAT revenue.

The EU is not good for business.

#WhyIamOut #BetterOffOut #BelieveBeLeave



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