Can you say the phrase “Your bed, you lie in it”?

First, this change in the law slipped through Parliament without any effective scrutiny, or warning, in December as part of the Internal Markets Bill, on which the attention was elsewhere, for good reason.

Second, the complaint made by overseas traders is entirely fair. The requirement that they be registered for UK VAT to make a single sale to the UK is absurd, not least when the UK’s VAT registration limit is £85,000. Not only does this smack of an unlevel playing field, it is administratively absurd. A business could, if this arrangement was replicated around the world, be registered in well over 150 countries and have to do VAT returns for each once a quarter. That is clearly impossible. It is the UK’s job to collect its tax owing, and not that of those who might wish to sell to us. It is entirely reasonable that companies are now refusing to sell to the UK.

Back that year or three the P³ was telling us that it was disgusting that folks selling on Amazon didn’t have to register for VAT. This was an outrage that must be stopped. Something Must Be Done!

Now that something has been done, as demanded, he’s agin’ it.

18 thoughts on “Can you say the phrase “Your bed, you lie in it”?”

  1. “A business could, if this arrangement was replicated around the world, be registered in well over 150 countries and have to do VAT returns for each once a quarter. That is clearly impossible.”

    Spud, if you recall, wants companies to be taxed on profits where their customers are. Which would require them to file tax returns in well over 150 countries…..

  2. Although a bit unkind, one could reply that it’s the UK’s job to collect taxes due, not the company’s, as a rebuttal of, uh, country-by-country reporting.

  3. Indeed – and making VAT returns provides a lot of the necessary data for the inevitable tax return. One advantage of VAT is Fred’s output is Jim’s input until you get to the final consumer so it is more difficult to get away with fraud.

  4. When we were in the EU, and a business sold downloadable items, it had to register for VAT where the customer resided. So, in 28 different countries at the time.

    Is it just bad when we do it, or something?

  5. Didn’t the VAT MOSS (Mini One Stop Shop) solve that particular problem?

    Don’t know. I just decided to tell the euros to fuck off and only sell to the UK.

  6. MOSS was a cludge thrown in after a number of years to fix a fundamental flaw in VAT. Doesn’t the great Spudhead know this? It is intrinsic to the tax and shows how f**cking nonsensical it is. Why did we decide to carry on with it?

  7. Just to clarify, the reporting is thrown solely onto the vendor – Businesses in a Member State can have one master-registration, but have to split up turnover by country and pay VAT at the appropriate rate on sales to non-business customers to each country (the so-called One Stop Shop); the UK is just reciprocating.

  8. I’m shocked – SHOCKED – to learn that there’s a problem in tax that Spud has only just heard of and is therefore presenting as A New Issue that has in fact been in existence for decades.

  9. I advocated VAT and Coro Tax gone as a post EU boost. Tim thought that not very useful for UK economy. Cant see how getting rid of 2 obnoxious taxes wont at least help.

    We will need something if we are ever to get out of the ruinous LD mess Blojob has got us in. Anybody any econ boosting specifics beyond less taxes less red tape etc?

  10. @DrEvil – there’s nothing simple about a sales tax. You have to have the same effect as VAT in that a business buying supplies for onward sale must have some way to avoid being taxed on them to avoid the same goods being taxes for every step in the supply chain. VAT is what you get when you start with a sales tax and then optimise the collection to make it easy for business.

  11. VAT is what you get when you start with a sales tax and then optimise the collection to make it easy for business.

    Yeah, but not your VAT system as currently implemented.

    You need one with a flat rate, on all items that a taxed. Then small shops know that everything is one rate and administrative costs go down precipitously, which makes it easier for them to compete with big outfits. No more fretting about whether your food is cooked or not.

    The downside is that you need politicians who are able to hold off on exemptions. The simplicity is ruined if tampons, for example, are zero rated. You get to see just how many special interest groups there are with a flat rate, as they all pile in trying to get their special baby exempted. Fuck ’em all. One rate, make it easy.

  12. Charles, the way we handle that tax issue is a business gets a ‘resellers license’.

    Bam. Done. They simply aren’t charged sales tax on stuff being bought for resale or as an input on a product to be later sold.

    Sure, there’s probably potential tax revenue lost with this system but that is more than made up through reduced paperwork and a smaller set of tax leeches to feed.

  13. Sales tax is not as simple as a resellers licence. What stops someone with such a licence from simply buing stuff for their own use? Or sellers pretending that they sold to someone with such a licence when they didn’t? That requires them to record who they sold to so that it can be audited, while VAT doesn’t. Under VAT the purchaser uses their VAT receipt to claim back the VAT paid. so the seller does not need to know who they are (obviously the buyer needs to know who the seller is, but you normally know who you’re buying from anyway.

    VAT also easily allows for different items to have different tax rates. Even then the bookkeeping and reporting is quite simple.

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