THOUSANDS of traders across Oxfordshire may be forced to close because of changes in value added tax (VAT) intended to make internet giants such as Amazon pay more.

At the moment VAT is charged at the rate of the country where the supplier is based, but under new EU laws, which come into force on January 1, they will be charged according to where the customer is.

And anyone selling digital services such as downloadable knitting patterns and ebooks abroad must register for VAT, even if their turnover is under £81,000 – the UK threshold.

Up to four million businesses in the UK could be affected, a third in the South East.


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Witney-based author Juliet Souch was among campaigners who met Treasury and tax officials last week to protest against the move.

Ms Souch, whose ebooks are sold via a small online publisher, said: “We saw jaws drop because they clearly had no idea how many people will be affected.”

The mother-of-two, who writes under the pen name Juliet McKenna, has written to David Cameron asking him to intervene.

Mr Cameron’s spokeswoman, Natasha Whitmill, told the Oxford Mail: “Mr Cameron has taken this matter up with the Treasury on behalf of his constituent, Juliet Souch, and is awaiting response.”

Campaigners warn the changes would destroy thousands of fledgling businesses. They said the cost and red tape to comply would make it impossible to continue trading.

Although they can sell through third parties, such as Amazon or Google Play – who would collect VAT for them – they would pay 30 to 70 per cent commission.

Ms Souch, 49, added: “I am absolutely appalled that there seems to be no understanding among officials of the thousands of small businesses involved in direct internet trading.”

Also affected is Wolvercote-based Megan Kerr, who suffers from endometriosis, which makes PAYE work difficult, and she relies on income from online tutoring.

Ms Kerr, 38, said: “My plan was always to create material for writing courses to sell online, as a way of generating extra income. I was at the point of launching but have had to cancel. The officials who came up with these new rules have no idea how the internet works.”

Oxford Mail:

Corset maker Julia Bremble is one of those concerned about the tax changes

The change will cause problems for Oxford-based corset maker Julia Bremble too. Ms Bremble, who runs the Oxford Conference of Corsetry and Oxford School of Corsetry, planned to sell digital downloads of workshops and talks and patterns through her online store She said: “This is the digital age and if someone wants one of my patterns, they expect to download it instantly.

“But if I can’t tell where the customer is based, I can’t risk it.”


How EU VAT rules affect businesses

- Each of the 28 EU member countries has a different VAT rate, ranging from three to 27 per cent – the UK rate is 20 per cent.
- Traders must store customers’ details for up to 10 years.
- Tax officials have set up a VAT Mini One-Stop Shop Service to simplifly things but campaigners say this doesn’t solve the problem.

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