By Alice Feilden on Small Business – Advice and Ideas for UK Small Businesses and SMEs
In the age of the pandemic, online shopping significantly increased. Businesses small and established alike took to e-commerce and shipping overseas, with the advent of social distancing and the closure of non-essential shops. But, the new EU VAT regulation could cause challenges for these businesses.
On 1st July, the European Union made changes to the way VAT is reported and paid. While the UK is no longer a member of the EU, the changes could impact businesses selling products and services online to customers.
The change to EU VAT reporting, which is designed to simplify tax reporting, increase online cross-border transactions and promote e-commerce, should help small businesses new and old operate in a post-Brexit, post-pandemic world.
What changes have been implemented?
Since 2015, the EU has been working to simplify VAT obligations for goods and service providers. In short, the EU made to ensure each country was benefitting from the correct taxes on goods arriving from elsewhere. The changes have been implemented in stages, with the 1st July introduction concluding the process.
One of the main changes to take note of is that for sales to consumers, VAT is