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Beginner’s guide to new VAT rules on digital products

Wednesday, January 21st, 2015

You may have recently seen articles in the press regarding the new ‘VAT Moss’ rules and wondered what on earth it is all about. The idea is that where digital services are supplied on a business to consumer basis, the supplier is responsible for accounting for VAT on the supply to the tax authority at the VAT rate applicable,in the consumer’s EU member state. This applies even if the supplier is not VAT registered

VATThe aim is to create a level playing field for UK businesses by removing the current competitive advantage of EU member states with lower rates of VAT.

So how do you know if the rules apply to you? Find out in 5 easy steps:

  1. Determine whether you are supplying a “digital service” (because if it isn’t, the general place of supply of services rules will apply).
  2. Determine the status of your customer ie, business or non-business. If it is a non-business, the rules apply
  3. Determine the place of supply (ie, the member state).
  4. Determine whether the supply must be taxed at the member state’s standard or reduced VAT rate, or whether it is eligible for any VAT exemptions (eg, most member states exempt betting and gaming).
  5. You need to identify the place where your consumer is based, has their permanent address, or usually resides. This will be the member state where VAT on the digital services supply is due. So if, for example, a UK citizen is an ‘expat’ who works or lives most of their time in Spain, then you, as the person supplying digital services to that consumer, should be charging Spanish VAT on those services and not UK VAT.

There is a handy flow chart to help you decide whether the rules apply to you or not here.

For more information go to the government hub here

PS ‘Moss’ stands for ‘mini one stop shop! No moss was harmed in this ruling!

£2,000 giveaway for advice- hurry!

Tuesday, February 25th, 2014

Did you know that your business may be entitled to a voucher for up to £2,000 from the government to help finance specialist business support?

Growth Voucher logoThe new Growth Voucher programme helps small businesses get expert advice on:

  • finance and cash flow
  • recruiting and developing staff
  • improving leadership and management skills
  • marketing, attracting and keeping customers
  • making the most of digital technology

and you will be pleased to know that this includes legal advice!

Provided your business meets certain key criteria and you are selected in the random selection process, you will receive a Growth Voucher for up to £2,000 to help finance specialist business support. You simply need to match the amount with your own funds.  The business support needs to be provided by an approved advisor listed in one handy Marketplace hosted by Enterprise Nation. Off to see my lawyer is an approved advisor too, so once you have your Growth Voucher, do feel free to call or email us.  Once you have been advised, you’ll be asked to take part in surveys to find out how the programme has helped you. It is as simple as that!

Details on how to apply:

There are around six stages in the Growth Voucher programme, depending on whether or not participants have been allocated a voucher.

Stage 1  Apply to join the programme on the gov.uk website.

Stage 2  Assessment of your advice needs, either by meeting with an adviser face-to-face or by completing an online questionnaire.

Stage 3: After completing the assessment, you will be given a suggestion about which area of strategic advice would be the most appropriate. You will be told, at this stage, whether or not you have been allocated a Growth Voucher.

Stage 4:You can then find a Growth Voucher adviser on the Enterprise Nation Marketplace.

Stage 5:Remember to agree on a price for the advice and check if it’s suitable to be subsidised using a Growth Voucher. Vouchers will cover up to half of the cost of paying for strategic advice up to a maximum of £2,000 (non-inclusive of VAT).

Stage 6: After receiving and paying for the advice, you then submit a claim for the subsidy. You have to provide evidence that the invoice has been paid and give details of the advice received. Claims will be processed on receipt and should be paid within 30 days.

NOTE: Growth Vouchers can only be used to obtain strategic advice that will help a business to grow. It will not subsidise activities such as building a new website or paying for membership of a professional body. DO check with your advisor before purchasing advice to ensure it qualifies for a subsidy.

Calling all Irish female entrepreneurs!

Saturday, July 14th, 2012

Irish flagGreat news for all of you female entrepreneurs based in Ireland: The Minister for Jobs, Enterprise and Innovation, Mr Richard Bruton TD, has just announced the establishment by Enterprise Ireland of a €250K Competitive Feasibility Fund aimed at stimulating high potential business start-ups by female entrepreneurs. The fund will be open for applications from Tuesday 17th of July 2012 until 4th of September 2012. This initiative is part of a drive by Enterprise Ireland to boost the number of innovative, export-oriented business being led and set up by female entrepreneurs.

The Female Entrepreneurship Competitive Feasibility Fund is designed to assist female entrepreneurs to investigate the viability of a new growth orientated business that can succeed in global markets. The focus is on developing new businesses that can move beyond the domestic market and demonstrate real potential for internationalisation.

The closing date for applications is 4th September 2012,and successful applicants will be notified by the end of September.

Full details of the Fund including the Application Form are available on the Enterprise Ireland web site:www.enterprise-ireland.com/femaleentrepreneurship

What are your rights as a debtor to a loan organisation?

Friday, July 6th, 2012

In these current difficult economic times, many small business owners are not only seeking loans from their banks, but turning to independent loan organisations.  On such organisation, Wonga has recently been criticised by the Office of Fair Trading (OFT) for sending customers letters which falsely accused them of committing fraud.  The customers in question had either fallen behind on repayments and entered a debt management plan; or had contacted their bank requesting a previous payment to Wonga to be retracted.

Wonga was also alleged to have customarily told customers working in the public or financial sectors that by being in debt they were breaching their terms of employment.

The OFT has told Wonga it may face a fine of up to £50,000 every time it adopts aggressive or misleading practices with its customers.

Wonga argues that the alleged incidents were few and isolated, and that procedures are now in place to ensure similar problems to do not occur in future.

If you have any queries relating to your legal rights as a customer of a loan organisation, please contact Jo Tall at jo@offtoseemylawyer.com.

Clubbing for Entrepreneurs…

Tuesday, May 29th, 2012

The coincidence of the invention of cloud computing; the increase in locations offering free wifi; and the upward trend for flexible working, now means that the sight of people tapping away at their lap tops in a public place is a common sight.  Do you have a favourite café where you like to work?

Unsurprisingly, the hospitality industry has responded by developing a new type of venue for business people who don’t operate from fixed offices.  Two such examples are The Hub, based in EC1 and N1, where entrepreneurs can subscribe as members from £25 per month (http://www.the-hub.net/); and The Hospital Club in WC2, where annual membership costs £650 plus a joining fee of £250 (http://www.thehospitalclub.com/).  Both aim to create inspiring environments in which people can network and collaborate as well as work alone.

…The likes of the RAC and the Athenaeum have clearly had their day!

Female Entrepreneur Focus: Gennese Williams

Wednesday, May 16th, 2012

The test for a true entrepreneur is to see whether the person in question has turned an adverse situation into a successful enterprise.

When Gennese Williams lost the sight of both her eyes in 2007, she decided she could no longer work for anyone again.  Far from burning her bridges, however, she built upon her existing experience in beauty, music and management to start her own business, MGW London.  She merrily believes in the mantras, “What you think you are worthy of, is what you will attract”; and “You change your reality when you change your mentality”.  In addition, when times are especially difficult, she recommends taking a break and “switching off from everyone” in order to recharge one’s motivation and creativity.

MGW London is an ambitious management and business consultancy agency.  In addition it has its own in-house production, make up, hair stylists and fashion stylists’ team, and a graphic design team (run by her brother); and together they provide a range of services to manage events, projects and brands.

Ms Williams says that the most effective way of attracting clients is by word of mouth and personal recommendations.  In addition she favours social media as it gives prospective clients “the freedom to check me out before they approach us”.

Her advice to other business owners is to remain dedicated to clients; to “be professional at all times, master your craft and listen to your clients’ needs”; and to “always be steps ahead to achieve the best and don’t sleep until you know the job is complete for that day”.

Mayoral Election Campaign Lowdown for Small Businesses…

Tuesday, May 1st, 2012

Who should London entrepreneurs vote for?

Is it possible that the Mayor of London could help the cause of small businesses and entrepreneurs?  Some of the mayoral candidates hoping to be elected on 3rd May seem to think so, based upon the pledges they make in their manifestos.  So, how do their various manifesto promises compare?

Boris Johnson (of the Conservative Party) lists “Growing the London Economy” as one of his pledges.  He insists that London has already succeeded in its relative resilience against the economic downturn.  He suggests that his priority is to boost the economic well-being of the city – by stating his intent to continue his current endeavours to direct funds and tax money according to Londoners’ wishes; to secure record funding from No. 10; and not to waste money on bureaucracy at City Hall.  Johnson appears to suggest that his aim is to boost the general economic well-being of the city rather than directly helping businesses within it.

Ken Livingstone (of the Labour Party) makes no direct promises in relation to the economy, nor to assisting small businesses.  Rather, his emphasis is on increasing funds for education, in order to increase young people’s prospects of employment.  He pledges a commitment to “restoring a London-wide Educational Maintenance Allowance of up to £30 per week in term by bringing together existing funds in colleges, universities, and local authorities.”

Brian Paddick (of the London Liberal Democrats) states, “We will establish a London Small Business Fund. We will work with socially responsible banks, so all viable small enterprises get the finance they need with mentoring support and advice too.”  This promise comes under the heading of his ambitiously entitled “Jobs and Opportunities for All” pledge, which is mainly focused on improving employment prospects for youths.  He promises a “London Youth Contract” to assist Londoners up to the age of 25 to attain work experience leading to a job; a new “Adult Skills” initiative; a fund to facilitate youth opportunities in needy areas gained via a voluntary £1 a night luxury hotel bedroom levy; the creation of “Youth Hubs” to provide advice, support and socialising opportunities for young people; and an enhanced careers advice service in schools.

Jenny Jones (of the Green Party) is the only candidate who explicitly pledges to help the plight of small businesses as “an absolute priority for City Hall”, as set out in her 10-point “Small Business Manifesto”.  She pledges to:

  1. Support a renaissance of micro, small and medium-sized businesses
  2. Use the Greater London Authority budget to support small businesses
  3. Protect and re-develop the traditional “high street”
  4. Prevent chain stores taking over independent shops
  5. Encourage Londoners to “buy local”
  6. Ensure public sector contracts go to small businesses
  7. Maintain the CompeteFor system
  8. Ensure small and local businesses aren’t disadvantaged by congestion and parking
  9. Only work with banks that lend to small business
  10. Increase small business representation in the community

Carlos Cortiglia (of the British National Party) does not appear to have a website stating his manifesto for London Mayor.  A Uraguayan national who has been living in the UK since 1989, he says he is “astonished” by the “hostility shown by many of the migrants towards the British and their way of life”, and emphasises, “I want to help preserve the freedoms, values and traditions that help make this a great country to live in.”  He appears to make no promises in relation to boosting London’s economy or helping small businesses.

Lawrence James Webb (of Fresh Choice of London) is affiliated with the UK Independence Party.  Of his various manifesto pledges, those of relevance to small businesses include:  cutting rates for “local businesses employing local people”; “saying ‘No’ to open-door immigration” in order to “create more jobs for Londoners”; and fighting any “EU red tape strangling London businesses”.

Siobhan Benita talks at length of her intentions to “create jobs and boost economic growth” in her Manifesto.  With regards London’s budget she promises to establish an “Independent Office for Budget Responsibility”.  For jobseekers she proposes free travel, and reduced fares for low earners.  For youths she pledges her commitment to working “with councils and businesses to ensure apprenticeships effectively deliver real employment and career prospects”, and working “with businesses, schools and colleges to improve pre-apprenticeship training”.  Of greater interest to Off To See My Lawyer clients, she states that she “will work with landlords to make better use of empty commercial property, including temporary use for community projects and for entrepreneurs to trial their ideas, negotiating Business Rate discounts and exemptions for innovative new businesses… My initial priorities will be the support of the creative industries and the life sciences sector.”

Perspectives from within the Eurozone

Monday, April 30th, 2012

We are all aware of the various endeavours being made by the British Government to improve the UK’s economy: managing the State budget; encouraging the activities of budding entrepreneurs; asking banks to lend more money to businesses; etc.  The emphasis is very much on how Britain can pick itself up in competition with other nations, and how the status of the British Pound can be raised.  As our media charts the progress of the French presidential elections, however, the British are starting to realise the extent to which the attitudes in France towards the current economic crisis differ to that in Britain.

Augustin Paluel-Marmont (Co-founder of Michel et Augustin) says that it is difficult for small firms in France to make the jump to becoming medium-sized, and that they are frequently bought up by foreign companies.  He is less concerned, however, about the strength of the French economy in isolation.  Rather, he supports the success of the European Union as a whole, believing that entrepreneurs in Europe should focus on the European market rather than simply that of their own native country.

Pierre Kosciusko-Morizet (Co-founder of Priceminister), also supports the European single currency, emphasising, “My company is very Europe-minded…  I think that is a good thing for the French economy.”  He adds, “I think the euro is something that is needed.  I’m really very disappointed with the English behaviour on that… You can’t build a new world by being selfish. You have to share values, currencies and you have to build things together.”

Henri de Castries (Chairman and Chief Executive of Axa) is optimistic that the Eurozone will ultimately thrive, once its member states have learnt how to pull together into “a more co-ordinated game”.  Expressing concern about the French national debt, and the fact “public spending is too high”, he proposes a structural reform in order to keep money “in the hands of those who know how to invest it, rather than having it taken by the state for additional unproductive spending.”  It seems he would prefer for the French Government to have a laissez-faire attitude towards its internal market – and for it to instead concentrate its efforts on co-operating with its neighbours in the Eurozone to make Europe succeed as a whole.