PM’s Brexit deal could force White Van Man and thousands more small firms to charge VAT for the first time
EU rule changes would drag countless more firms into the VAT system — meaning mountains of red tape, MPs claim
THERESA MAY’s Brexit deal could force White Van Man and thousands more small firms to charge VAT for the first time, MPs claim.
The tax bombshell was detailed in a cross-party Commons Committee report released on Christmas Eve.
Currently the UK exempts all small and medium sized firms with an annual turnover of less than £85,000 from charging VAT on their products and services.
But the EU wants to set an upper limit across the bloc at £76,700.
And under the terms of PM’s proposed 20 month post-Brexit “transition phase”, the UK will have no veto on EU rule changes – and will almost certainly have to adopt Brussels legislation.
This would drag countless more SMEs into the VAT system – meaning mountains of red-tape as they are forced to spend days filing paper work to the taxman.
The report from the European Scrutiny Committee said: “Having to transpose the Directive could mean that the Government would be under a legal requirement to lower the VAT registration threshold.”
Furious hardline Tory Brexiteers said the revelation highlighted the “dangerous implications” of the UK being a ‘vassal state’ or tied to Brussels without any influence over its laws.
Tory MP Marcus Fysh said: “Should the transition phase be extended we could be exposed to all sorts of other anti-competitive regulation coming down the line that we could do nothing about.”
People’s Vote campaigner, Labour’s Chris Leslie said it boosted the argument for a second referendum. He said: “The Prime Minister’s plan makes the UK a rule-taker and removes our say around the table.
“This is another thing that none of us could possibly have known about back in 2016 and whatever way you voted then you weren’t voting for more taxes and bureaucracy on small business and the self-employed.”
Theresa May plans to bring her Brexit deal back before the Commons in the second week of January – after pulling it this month due to overwhelming opposition from more than 100 Tory MPs.
A poll of Tory party members revealed that almost three-quarters – 71 per cent - still don’t support the PM’s agreement.
The Conservative Home survey of 1,200 activists found that only just over a quarter backed her plan.
In November the same poll found 71.7 per cent were against.
Separately, Labour Shadow Chancellor John McDonnell revealed he was opposed to the idea of MPs having “indicative votes” on their preferred Plan B. He said it would be unlikely to break the Brexit deadlock.
He told the Financial Times: “The idea of indicative votes is just to run down the clock even further towards March 29 (Brexit day).
“People aren’t that gullible. They’ve seen through that.”
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