Have Plans for a Standard VAT Return Across Europe Stalled?

7 November 2014, 12:11

If you own a business that brings in enough revenue to go over the VAT threshold you’ll be familiar with the idea of filling in VAT returns. This entire process could change however if those in charge of the EU get their way.

Plans have been afoot for some time now that aim to bring in a streamlined VAT return that would be filled in by all businesses paying VAT across the European Union. The idea was first mooted in October 2013 but now, just over 12 months later, some major issues have arisen.

The idea was to bring in a standard form that everyone would use. Originally the form had 28 boxes to be filled in. After numerous alterations to appease various countries in the EU, that standard form now has a whopping 60 boxes instead. To give you an idea of where this compares to how things are currently done in the UK, this would be 51 boxes more than UK businesses currently have to cope with. That’s right – the total number to fill in at present is a mere nine. No wonder the UK is up in arms about the idea.

So what will happen next? In truth no one is quite sure. However with the problems that have already come up, it seems fairly certain that no changes will be made in the foreseeable future. All the while certain countries (and the UK is by no means the only one) are up in arms about potential changes, nothing much is likely to happen.

In addition to this some other bureaucrats in the EU are voicing the idea of completely changing the way the VAT system currently works. Algirdas Semeta, who was in charge of EU taxation, likened this to buying a new car rather than just trying to fix various parts of an old one. It’s easy to understand what he means but is this biting off more than the EU can chew? How on earth would companies across the European Union react to huge changes coming their way? It is impossible to please everyone with a new system or indeed a system that has been adjusted to try and make it work better.

One size fits all: this has always been the main idea behind the EU. As we can see here, this is yet another example of how the idea doesn’t actually work in reality. It remains to be seen whether the stumbling blocks to the single VAT form will become too much to get over. We will certainly be watching more closely to determine whether there ever will be a single form for everyone, or whether things will continue as they are at present.