Sajjad welcomes EU support for small businesses over VAT rules

The Conservative MEP team in the European Parliament have won an assurance from a leading EU Commissioner to ensure new VAT rules introduced in January, do not have an adverse impact on micro-enterprises.

The so-called VATmoss rules mean that businesses have to collect VAT for each individual country they sell to, and keep the records of all their transactions for years.

The rules were brought in to stop big companies from abusing international tax rules, but unfortunately lawmakers did not foresee the emergence of digital micro-businesses, such as the sellers of e-books.

Conservative MEPs – backed by Prime Minister David Cameron – have been lobbying the Commission to introduce a threshold which will ensure the new rules do not create extra burdens for micro-enterprises.

Now Commission Vice President, Frans Timmermans, effectively President Jean-Claude Juncker’s number two in the Commission, has promised that the new rules would be examined to head off any unintended harm to small digital companies.

In a debate with the European Commission in Brussels, the Commission had initially tried to blame national governments. However responding to concerns raised by Conservative MEPs Frans Timmermans pledged to evaluate the effects of the new rules, saying “We would never want this legislation to have adverse effects on small entrepreneurs who are often at the cutting edge of creating new employment”.

Welcoming the review Sajjad commented “Frans Timmermans’ pledge means we now have the hope of positive change for the many small businesses that have been affected by this rule”.

Sajjad has been Conservative Legal Affairs Spokesperson since 2009. Much of his work is delivering the government’s pledge to cut unnecessary red tape. Legislation that Saj has introduced through the European Parliament has ensured micro enterprises are now excluded from all new legislation unless the Commission can demonstrate it is of benefit. He is now working to extend this to include all SMEs.