Campaigners have issued a plea to the government to temporarily halt the implementation of the new European VAT rules, which came into force on 1st January 2015. As a result of the new legislation, over 200 small businesses plan to cease trading or have already done so.The legislation was originally intended to prevent large companies from dodging tax, although this appears to have backfired for smaller companies.
Businesses which sell digital services or products must now pay VAT at the rate applicable for the country of the consumer. However, this is too complex for most of the small companies, although HMRC have provided a simpler alternative, according to the founder of EUVATaction.org, Clare Josa. The website is campaigning for the implementation of the rules to be suspended.