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Prime Minister vows to tackle EU VAT issues for contractors

Prime minister David Cameron has vowed to take on EU VAT issues that crop up when it comes to contractors, freelancers and other sole traders in the UK.

In a rare display of empathy, Downing Street recently said at this week’s European Council summit meeting that the PM will be speaking directly to Jean-Claude Juncker, the president of the European Commission, about how VAT regulations are making the lives of self-employed Brits harder than they need to be. New rules, which came into effect at the beginning of this year, make it so that digital product sellers need to pay VAT at whatever rate is set at the buyer’s location instead of the seller’s VAT rate.

If that wasn’t bad enough, there’s insult added to injury as well as digital service providers have to keep sales records for a bloody decade. Not only that but while other sellers get an £81,000 threshold, purveyors of digital sales are most purposefully left out. I swear, it’s almost as if the regulations were drafted specifically to drive Brits completely and utterly mad!

The Association of Independent Professionals and the Self-Employed has been campaigning for something to be done about this for a long time now. In fact, as soon as it was made known that Cameron would be going head-to-head with Juncker, the IPSE more or less started cheering wildly, especially since the trade industry body’s policy and external affairs adviser, Jordan Marshall, has gone on record calling the VAT policy changes “desperately wrong;” the changes were meant to trap Internet giants like Amazon and Google and prevent them from engaging in tax avoidance by funneling all their digital sales through low-VAT countries according to Marshall, but the regulations have turned out to be positively crippling for smaller firms – especially sole traders, contractors and other self-employed Brits.

Marshall also called the new rules “nonensical,” especially when it came to requiring sole traders to keep records for ten years. Honestly I have to agree wholeheartedly.

Of course, all our hopes and prayers now rely on the Prime Minister to get his act together and actually do something about it. I’m hopeful – but I’m not holding my breath!

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