Decision Maker Response

Vince Cable MP’s response

Dec 8, 2014 — The changes to VAT on digital products is not new or sudden - the change was agreed in 2008 and we've done a lot to communicate it to businesses. Regardless, the majority of UK micro-businesses will not be affected.

Here's a breakdown of how the changes affect micro-businesses:

Micro-businesses that trade only in the UK - and never sell to the EU - won't have to do anything. They won't have to register for VAT in 2015.

Micro-businesses that do sell to other countries in the EU but only do so through marketplaces like an app store also won’t have to register for VAT. It's up to the operator of the marketplace to account for VAT charges.

Micro-businesses that trade to the UK and to the EU will have to register for VAT. But if they can separate out their cross-border business from their domestic they will only have to register for VAT on their cross-border sales. UK sales will be unaffected.

Hope that helps clear up the change.

Vince

P.S. Lib Dems want to introduce a digital bill of rights - can you let us know what should be a part of it? http://www.libdems.org.uk/digital_rights