ALSO IN THIS SECTION:

Financials & Accounting

The BASDA Financials & Accounting Interest Group incorporates the BASDA VAT Working Group.

This  Interest Group has been set up to cover topics specifically relating to software for financial, tax and self-assessment, including:-

Financials Interest Group is engaging with:

HMRC, ICAEW, Companies House, CIOT, VEG plus tax and legislative bodies in the EU and world wide (e.g. OECD).

Who should get involved?

Any business software developer, or reseller, who has a product which handles accounting and finance. The breadth of the legislation covered by the Financials Interest Group means that all types of Financials software will have users who will be impacted and therefore will need to ensure their products can manage the legislation, reporting, and submission requirements being considered.

The VAT Working Group – update

The EU are considering the option of following the principle set out for services, where VAT would need to be charged, by the supplier, at the VAT rate of the country of destination. This could mean that a UK exporter would have to know the tax rates and tax rules of 27 states if they want to trade across Europe.

One of the main drivers is the widespread problem of VAT fraud across the EU.

The EU have set up a body called the VAT Expert Group (VEG) to debate this change and make representations to the EU Commission.

The BASDA VAT working party represents the views of BASDA members in the UK business software industry on the proposed changes through our contact, Tarlochan Lall. Tarlochan is a tax barrister who sits on the VEG representing the Chartered Institute of Taxation (CIOT).

BASDA’s main concern is the very significant burden to SMEs and software suppliers and that the VEG may be underestimating the size, scope and impact of the changes under discussion.

At a recent meeting with HMRC, senior officials expressed the opinion that the original timescale for changing the application of VAT rates for B2B goods movements had been ambitious and any changes are likely to be longer term. The original plan was that the VAT Expert Group (VEG) would make proposals to the EU Commission in Summer 2014. Thoughts are that this may not now be practically possible until the end of 2015. There would then be an extensive consultation, together with impact assessments, before any progress towards a formal EU Directive.

VAT on intra-EU transactions accounts for around 600 billion Euro a year and, although there is a real political will to have tax charged at the place of destination, there is also a recognition of the values at stake and the need to get the process right.

Next Meeting

The next Financials Interest Group meeting is to be confirmed. For more information please email: lynne.wallis@basda.org