Shortly before Christmas, the Business Secretary Vince Cable, promised to help British firms compete better against their continental rivals, by cutting European red tape.

The Government plans to stop the “gold-plating” of EU directives in cases where implementation goes beyond the minimum standard decreed. This new policy will take immediate effect.

In future, the text of European directives will be written directly into British law and will mean that the UK’s interpretation of the law is not unfairly restricting British businesses and limited company contractors. Additionally, every five years ministers will review the European directive legislation and will consult with businesses on the application of the rules.

The ARC has welcomed the coalition’s move, saying it will help businesses in the UK compete fairly. Chairman Adrian Marlowe said that nobody has asked for favours, but by helping Britain compete, the way is set for greater employment and prosperity.

Copying EU directives directly into law without adding interpretations makes sense and this should ease the problems of actually implementing the regulations. EU legislation is not subject to open debates unlike UK led regulations. Legislation, such as the AWR, will be able to pass straight into law without parliament voting on it.

Marlowe explained that the Agency Workers Directive contains “gold-plating” that is not essential under the EU directive and this has put both recruiters and employers at a disadvantage.

Marlowe also pointed out that the use of agreements between social partners causes concern. A few organisations get disproportionate authority and if this device continues to be used he urges Mr. Cable to make sure the entire process is open and transparent.

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Image: liquid gold by milena mihaylova

Contractor accountants and small businesses could benefit from a new invoicing directive from the Council of the European Union.

The new system, which will simplify VAT invoicing processes, must be in place by 2013. At that time, tax authorities must accept and handle electronic invoices in the same way as the current paper documentation.

Electronic invoicing experts at Deloitte welcomed the announcement saying that computerised financial systems already store invoice documentation securely and so it makes sense to acknowledge the new technology is secure when it comes to tax audits. However, they would prefer to see the directive implemented before 2013 if possible.

The UK and the Netherlands already have a system whereby companies can make arrangements to make sure all the necessary procedures have been followed in order to produce a correct tax return.

The directive also contains anti-fraud measures and deadlines for the issuance of invoices which are aimed at speeding up the exchange of data on intra-EU supplies of goods and services.

The European Union will also need to provide new standardised instructions regarding the archiving of accounting documents. Currently, UK companies and limited company contractors must retain e-documents for at least 6 years but other member states have different retention requirements.

© 2010 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: 088.365 – March 29, 2010 by meddygarnet