Service providers liable to new VAT rules
Tuesday January 5, 2010
UK firms supplying services to Europe are now liable to extra costs due to new rules that came into place at the beginning of this month.
Under the EU VAT package, services providers must now submit quarterly sales lists outlining the value of the services supplied to each VAT-registered customer, whereas previously this requirement was only necessary for goods providers.
According to experts, the new changes will not only make VAT compliance more challenging, but will add to the already hefty burden of paperwork many firms currently have to contend with.
The regulations are aimed at preventing businesses from relocating just to try and reduce their VAT bills and are being introduced by all tax authorities within the EU.
Stephen Alambritis, of the Federation of Small Businesses, told the Times: “We would urge the government to look at this regulation and make sure that we are not gold-plating the European requirements.”
Karen Barrett, chief executive of Unbiased, recently pointed out that 60 per cent of firms already believe their tax burden is “unfair” or “very unfair”.