VAT Simplification - Cooper Parry comments ... 
Added : 7th July 2008
"Businesses will need to consider their internal accounting systems in view of the revised reporting requirements."
Any business that buys and/or sells services overseas will be aware of the somewhat confusing VAT rules regarding whether or not VAT should be charged.
Steve Taylor, VAT Senior Manager at Regional Business Advisers, Cooper Parry says "The EC has already agreed simplified rules that are due to be introduced with effect from 1 January 2010 and this should mean a lot less confusion and costs involved with having to pay VAT before reclaiming it under the EC VAT refund scheme and where a UK supplier of services has to register for VAT in another EC country."
Steve says "In most cases it will be the responsibility of the customer to account for VAT via their own VAT return which for the majority of businesses will simply be a paper exercise. However for those businesses that are not able to recover all of their VAT the revised rules could result in an additional and unwelcome VAT cost."
Also the EC has put forward proposals to extend the current reporting requirements for the movement of goods to include services and there is also a mention of a requirement for businesses conducting transactions with other EC countries over a certain annual value to have to submit monthly instead of quarterly returns. This latter proposal could have a serious impact upon cash flow for some businesses.
Steve warns "Apart from the direct costs involved, businesses will also have to consider the implications upon their internal accounting systems that may have to be adapted to cope with the revised reporting requirements."
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