Chamber News

If your heart sinks every time anyone mentions VAT, you’re far from alone!

However, one piece of good news is that the European Commission has put forward a proposal to make things more straightforward for international traders trying to grapple with the tax administrations in several different countries and in different languages.

If approved, this proposal should become reality in 2015.

For more details, please read the article below:

“Doing business in more than one Member State often means dealing with several tax administrations in different languages. Coping with multiple VAT obligations can accordingly be both burdensome and costly for companies. With this in mind, the European Commission has put forward a proposal which it sees as a first step towards a One Stop Shop for all electronically delivered services which, if approved, will benefit businesses from 1 January 2015.

As set out in last December’s Commission Communication on the future of VAT (COM(2011) 851), the One Stop Shop approach for EU trade across borders will be applied first to e-commerce, broadcasting and telecom services. In the future the Commission will seek to extend the concept on a gradual basis to other goods and services.

Since July 2003, such a system has been in place to simplify VAT obligations for non-EU suppliers of electronic services to EU consumers. The system has functioned well, the Commission argues, allowing non-EU traders who are liable to pay VAT in the Union to choose a single place for VAT compliance. Via this single electronic portal, a single VAT declaration and payment is submitted. On the basis of the information supplied, this payment is allocated automatically to the different Member States where VAT is due.

The VAT Directive (2006/112/EC) provides that, as from 1 January 2015, all telecommunications, broadcasting and electronic services are to be taxed in the Member State in which the customer is established or has his or her permanent address or usual residence, regardless of where the taxable person supplying these services is established. As the VAT becomes due where the customer belongs, this makes it necessary to broaden the current scope of the existing One Stop Shop system. Currently, a scheme is already in operation for non-EU businesses supplying electronic services. The scheme will now extend to both EU and non-EU businesses and – in addition to electronic services – will incorporate telecommunications and broadcasting services.

It will allow suppliers to use a web portal in the Member State in which they are identified to account for the VAT due in other Member States on supplies of these services to private consumers. Where a VAT return is incomplete or incorrect, is submitted late or the payment of VAT is late, any interest, penalties or any other charges due will be paid directly to the Member State of consumption.

The proposed measures only relate to those aspects (definitions, scope of the schemes, reporting obligations, identification, exclusion, VAT returns, currency, payments, records) for which a common understanding is needed before designing the IT systems. Other measures, notably relating to the determination of the location of the customer, will be proposed by the Commission at a later stage.

The intention is to extend the One Stop Shop to even more activities, including supplies of goods. The Commission has at this stage called on all Member States to agree to these measures in 2012 as a common approach is seen as key to designing the IT systems which will provide the necessary exchange of information between tax authorities in 27 Member States and to ensure its full implementation by 2015.

Algirdas Semeta, Commissioner for Taxation, Customs, Anti-fraud and Audit, said: “The complexity of the current EU VAT system is an obstacle to doing business in the Single Market. The One Stop Shop will greatly facilitate cross border expansion of European start ups. This in turn will help to generate growth and jobs.”

The full text of the draft regulation, amending Regulation 282/2011 which provides binding rules on the application of certain provisions of the VAT Directive, can be found here.”

A client of the Colombian British Chamber of Commerce in Bogota, would like to offer their leather products and accessories to interested parties of importers or brokers within Norfolk.

They are looking to identify prospective buyers of leather handbags, wallets, key holders, leather files and much more, in order to introduce to new markets, an exotic range of accessories with ethnic designs and value-added features, from Colombia and Latin America.

The combination of using ancestral techniques for leather crafting with fabric embroidery harnessing modern quality control methods, means that these products are of the highest quality. These accessories represent a unique cultural identity whilst at the same time having the functionality required for today’s urban living.

Please take a look at their examples shown in the PDF below.

Anyone interested in learning more, please contact the International Trade Team on 01603 729711 or [email protected]

Here’s an opportunity to visit China in May. The visit will include one-to-one meetings with companies in Zhejiang and Jiangxi, important manufacturing provinces around Shanghai where there’s a great need of expertise to improve efficiencies and the environment.

The programme, set out in the link below, has been tailored for companies in the following sectors:

• Automotive
• Cleantech
• Energy Management
• Light Engineering
• Lighting
• Manufacturing environment
• Product Quality
• Production Efficiency
• Water and Waste Management

Eligible SMEs can apply for a £750 Market Visit Support Grant that will offset the £750 participation fee for setting up the programme and meetings.

Interested? Please register initially by emailing Jean Knott at [email protected] and we’ll arrange for you to receive further information.

Commenting on today’s Budget, John Longworth, Director General of the British Chambers of Commerce (BCC), said:

“Never has there been a more important moment for the government to focus on British business and long-term, sustainable growth. The Chancellor’s commitments to contain the deficit and reduce corporation tax will be welcomed warmly by business. However, many small- and medium-sized companies will feel the measures overwhelmingly benefit the biggest businesses. Smaller firms will be disappointed George Osborne did not do more to support confidence and growth in the real economy.

“While there is a 1% cut in Corporation Tax, companies will still be hit with a 5.6% rise in business rates from April. In addition, businesses face lower allowances for investment in new plant and machinery in most areas, and will see no further incentives to create employment, particularly for young people. And while the Chancellor has reduced the cost of borrowing for some businesses, the problem of accessing finance in the first place remains, and will become more acute as the economy begins to grow.

“The Chancellor reiterated promises on reforming infrastructure, planning, employment law and boosting exports, which will provide enterprises with some reassurance. Business needs to see radical and meaningful delivery of these measures, from the overhaul of transport and broadband networks, to helping firms look for new markets overseas.

“The Chancellor today reasserted a real commitment to prudence. He also made an important rhetorical commitment to business growth. But we’ve heard much of this before. In the coming weeks, actions will speak louder than words.”

***For further comment on specific Budget measures see below***

Commenting on the new forecast published today by the OBR, David Kern, Chief Economist at the British Chambers of Commerce (BCC) said:

“We agree with the broad thrust of the new OBR forecast, although it is still slightly too ambitious. We share the OBR’s view that the UK economy returned to positive growth in the first quarter of 2012, and that there will be no double-dip recession. Growth will gradually improve from the middle of this year, and improve further in 2013 and 2014. However, more weight should be given to the risks of a setback in the eurozone and to possible distortions that could result from the Diamond Jubilee and the Olympics later in the year.

“We expect growth of 0.6% in 2012 and 1.8% in 2013, while the OBR predicts 0.8% and 2.0%. Furthermore, we believe that the OBR’s predictions for UK unemployment are still too low. The OBR expects the jobless rate to increase to only 8.7% of the workforce, while we expect it to reach 9%, given the time it will take for the private sector to absorb job losses in the public sector. We agree with the OBR that the deficit reduction plan is on course, and that the government should achieve its aim of eliminating the deficit around 2016.

“It is disappointing that British businesses were not given much help with cost pressures, such as the planned rise in business rates that should be scrapped. This is unsurprising though, given the higher than expected borrowing figures for February. We do, however, support the decision to finance additional tax cuts by introducing more spending reductions elsewhere. This will improve the competitive and productive potential of the UK economy.”

Commenting on today’s Budget, John Longworth, Director General of the British Chambers of Commerce (BCC), said:

On business rates:

“The Chancellor could have used today’s budget to offer real relief to businesses struggling with next month’s 5.6% rise in business rates. Action to stop the great business rates robbery would have given many small- and medium-sized firms much greater confidence to invest and hire.”

On credit easing:

While credit easing is a step in the right direction, it is not a panacea for all the problems faced by businesses trying to access finance. The National Loan Guarantee Scheme will make some loans more affordable. But it will not help the smaller, younger, and high-growth firms that have trouble getting credit in the first place.

On the 50p tax rate:

“Business has long said that the 50p top rate of income tax is a disincentive to enterprise, to wealth creation, and to investment here in the UK. Most hard-working businesspeople will be glad to see the back of this counterproductive tax rate.

On Sunday trading:

“The government is right to make sure the UK economy sees the maximum benefit from the influx of tourists this summer for the Olympic and Paralympic Games. Longer opening hours will ensure retailers can benefit from tourist trade. This eight week period will serve as a useful trial to provide evidence as to whether the relaxation of Sunday trading rules on a permanent basis would provide a boost to the economy in the long term.”

On infrastructure:

“The BCC welcomed the Prime Minister’s announcements on road investment earlier this week, and we are pleased to see progress has been made in encouraging the UK’s pension funds to invest in UK infrastructure. However, this must be scaled up significantly over the coming months, and investments must be made swiftly in key projects in order to benefit business, growth and inward investment.”

“We have long championed the importance of the Northern Hub project, which will see capacity and speeds increased between Manchester, Sheffield, Bradford and Preston. The Chancellor’s announcements on this are welcome, but the government should go further and commit to funding the project in full. Only then will the real benefits start to be felt.”

On aviation:

“The Chancellor was right to acknowledge aviation capacity constraints in the South East. However, business will be hugely disappointed that publication of the Aviation Policy Framework for the whole of the country has been delayed until the summer. For all the government’s rhetoric, continued delay risks leaving the UK at a competitive disadvantage to its global trading competitors. While Britain dithers, others do.

We have long said that Air Passenger Duty is a significant burden on the business community, who need to fly to access markets and trade goods with the world. This is why we are disappointed to see the government press ahead with its planned double inflation rise from April. We are, however, pleased to see that the Chancellor is devolving the power to set the rate of APD in Northern Ireland to the devolved Assembly.”

On planning:

“The evidence from good businesses trying to expand consistently shows that the UK planning system is a brake on growth and jobs. The Chancellor is right to tackle the complexity, cost and inconsistency of the planning system and must not retreat from his commitment to radically simplify the planning system when he publishes the new National Planning Policy Framework next week.”

On youth employment and enterprise:

“We are disappointed that the Chancellor did not announce additional measures to incentivise businesses to employ more young people. While the freeze in the youth rate of the National Minimum Wage is a welcome step, an extension of the Youth Contract would have encouraged more companies to take on and train young people seeking to break into the world of work.

“We strongly support the Chancellor’s proposal to pilot a youth enterprise loan scheme, using a similar model to the student loan system. Young people wanting to jump into the world of business, rather than attend university, deserve support to make their ideas a success. Chambers of Commerce up and down the country stand ready to help mentor young people who want to take the leap into business and access this support.”

On incentives for local growth

“The announcements of Tax Increment Financing in England and new capital allowance provisions for Enterprise Areas in Scotland and Wales, after long and protracted delays, are very welcome. In the coming weeks, Ministers must focus on ways to create even more incentives to invest in these zones – and help businesses to power local growth in all areas of the country.”

On support for exporters:

“We are reassured by the Chancellor’s commitment to do more to help companies secure trade finance, and are working closely with UK Export Finance to ensure that all businesses that want to trade overseas get the help they need. Chambers of Commerce are the first place many businesspeople go when they start to trade internationally.”

On Enterprise Finance:

“The Business Finance Partnership and Enterprise Finance Guarantee are both schemes that can help businesses access finance, and the Chancellor’s announcement to expand them is a step in the right direction. It is important to remember, however, that the practical implementation of these initiatives will be the true test of their success. Finance products designed in Whitehall need to be rolled out effectively across the UK, and communicated effectively to businesses and investors, if they are to create real benefits.”

On the State Pension Age:

“Business will support automatic reviews of the State Pension Age, rather than the ad hoc rises that we have seen in the past. Employers’ main concern, however, is the vacuum that was left when the Default Retirement Age was removed in April 2011. As the State Pension Age rises further, this issue will only increase for companies across the country.”

On pensions:

“The single-tier pension announced by the Chancellor will make it clearer to individuals that private saving will benefit them in retirement. From October 2012, firms will begin auto-enrolling staff into pension schemes. This measure will give employers confidence that their contribution will not just subsidise the government’s means tested top-up, but will genuinely enhance the retirement of their employees.”

On Royal Mail:

“The Government’s action in taking on Royal Mail’s pension liabilities will finally allow the future of its essential services to be guaranteed. Even in today’s digital world, the post is an essential part of Britain’s business infrastructure – a universal service must be maintained.”

Norfolk and Suffolk Chambers have formed an alliance to establish an agenda for economic growth and created a joint manifesto.

Firms in Norfolk and Suffolk are up to the economic growth challenge, but they need leadership from policy and decision makes who influence and shape the business environment. In this joint manifesto, the Norfolk and Suffolk Chambers have outlined their joint five key areas for economic success with real growth in jobs and wealth creation at its centre.

Caroline Williams, Norfolk Chamber CEO, commented: “As the UK economy continues to make a slow return to growth, it is essential for the business community in the two counties to be at the forefront of developing a robust and sustained economic upturn.

Commenting on the government’s decisions today (Monday) on National Minimum Wage rates from October 2012, John Longworth, Director General of the British Chambers of Commerce (BCC), said:

On the Youth and Development rates:

“Business has been telling the government for some time that the minimum wage cannot be a one-way bet, particularly when we have over one million young people unemployed. We are pleased that ministers have heeded our call to freeze the youth and development wage rates. Freezing these rates will ensure employers are not put off from employing young people, and give them more confidence to invest in their training.

“In this week’s budget, the government should also be more radical, and devote additional resources to the Youth Contract to help small and medium-sized businesses with the up-front costs of taking on young people.”

On the adult National Minimum Wage rate:

“We are disappointed that the government has chosen to raise the adult National Minimum Wage rate by 1.8%, far above our recommendation. While the pressures of inflation are hurting many people, especially the lowest-paid, this decision adds significantly to the cost of doing business, and feeds wage inflation at higher levels.

“In his Budget on Wednesday, the Chancellor should offset the hike in the National Minimum Wage by scrapping the huge business rate rise which will affect many businesses from April. This rate rise will stop many from employing more people, whether on minimum wage or above.”

This week, the Commission published a new comprehensive guide to the different forms of support available for SMEs from the EU. This includes grants, loans and guarantees and is available directly or through programmes managed at national or regional level such as structural funds.

Find out how your business could benefit here.

If you have any questions, please contact Karen Clements.

The government today launched its National Loan Guarantee Scheme, which is intended to help businesses with a turnover of less than £50m access funding more cheaply.

The guarantees will apply to new term loans, hire-lease arrangements and refinancing of loans (where the term amount has changed). Please see the attached information from the government, designed to help businesses understand the scheme. Currently, the banks participating in the scheme are RBS, Lloyds, Santander, Barclays and Aldermore (further banks may join).

More information can be found here.

If you have any questions, please contact Steve Hughes

Further information can be found in the below PDF’s

Commenting on the announcement made by the government today on proposals to launch a consultation on no fault dismissal rules, John Longworth, Director General of the British Chambers of Commerce (BCC), said:

“Employers have long argued that rules around dismissal do not work for business, so a new no fault dismissal route would be an extremely positive step forward, and would send the message that the government is serious about de-regulation. If these proposals are given the go ahead, it would allow for the swift resolution of a dismissal, and some firms would be willing to pay a premium to achieve this.

“This is a big step in the right direction, but it should be part of a package of reforms, including reforming redundancy rules and introducing tribunal fees for claimants. A substantial overhaul of employment regulations will give businesses confidence to invest and grow, and in turn drive economic recovery.”

Norfolk Chamber members service Chamber Utilities™ has published a free ‘Quick Guide’ and launched a Renewal Reminder Service to help chamber members avoid making costly mistakes on renewing energy contracts.

The guide advises organisations how to avoid falling foul of expensive ‘out-of-contract’ and ‘deemed rates’, which sting many businesses each year.

All business customers must either re-negotiate their contract or give adequate notice to terminate their services prior to a contract end date, serving up to 90 days’ notice. Failure to do so can result in over-inflated, uncompetitive ‘out-of-contract” or ‘extended/deemed rates’ until a new deal is struck.

The Quick Guide explains how and why the penalty charges occur and how to correctly manage existing gas and electricity supply contracts to prevent being subject to over-inflated energy prices.

With the busiest spring renewal period fast approaching, Chamber Utilities™ is advising organisations to act now to avoid financial penalties and the prospect of being locked in to an uncompetitive contract.

Chamber Utilities™ Renewal Reminder Service provides Chamber members with an automatic reminder before their energy contracts are due for renewal. Once members have registered for the service they are then notified well in advance of their renewal date to give them ample time to serve notice on their supplier. This ensures they won’t suffer from over-inflated Out of Contract tariffs and provides time to search the market and find the best deals possible.

“Companies which have contracts renewing between April and October should act now to avoid potential penalties,” said Gary Collins, Chamber Utilities™ Business Manager. “Suppliers require between 30 to 90 days’ customer termination notice to switch contract. Many businesses don’t realise this and are leaving it too late. Most organisations faced a 20% increase in renewal costs last year and the upward trend continues, so there is a clear financial imperative to test the market in an attempt to mitigate potential cost increases.”

The ‘Quick Guide to Out-of-Contract and Deemed Contract Rates’ is available free to download from: https://www.chamberutilities.co.uk/whitepapers.aspx

To register for the free Chamber Utilities™ Renewal Reminder Service, visit: https://www.chamberutilities.co.uk/renewal.aspx

Commenting on the producer price figures for January 2012 published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:

“The January figures show a further significant slowdown in the pace of producer price inflation. Though the absolute figures are still relatively high, the trend is moving in the right direction and will contribute to the lower consumer price inflation we expect to see throughout 2012. This will ease the squeeze on both businesses and consumers, and will allow for a modest improvement in demand in the economy.

“The figures will reassure the MPC that with inflation set to fall, they were right to announce an increase in quantitative easing. But the welcome economic data we have seen in recent weeks should not lull us into a sense of complacency. Introducing policies to support growth should be a top priority, such as reducing red tape and implementing a credit easing programme to help improve the flow of credit to businesses.

Commenting on the manufacturing output figures for December 2011, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:

“These figures are stronger than expected and support our belief that the UK economy will avoid recession. The sector’s overall performance has been relatively weak in recent months. However, the December upturn is positive as it comes in the face of a tough austerity programme at home, and difficult challenges facing UK exporters in the eurozone.

“Every effort must now be made to build on the December improvement and strengthen business confidence. We hope that the MPC will announce an increase in quantitative easing later today, but this must be supplemented by policies to support growth. This means the implementation of effective credit-easing measures or an SME bank to improve the flow of credit to businesses. In the March Budget, we urge the Chancellor to announce meaningful steps that will empower businesses to create jobs and deliver growth.”