The GCA has been speaking out in high places this week while the association’s Council members unexpectantly found themselves only a few feet from the Prime Minister Boris Johnson at what was the first in-person Council meeting since last year.
‘New EU VAT rules to cost British SMEs £180m in extra red tape’ is the headline of an extensive article that appears on both the Financial Times’ online news site, as well as in today’s newspaper (May 20). The thrust of the article is to highlight how new rules concerning VAT, that come into effect on July 1, will see increased costs being imposed for many SMEs, including greeting card companies.
As the FT journalist Oliver Barnes explains, the new rules, were originally designed to stop an estimated €7bn in annual VAT fraud by non-EU ecommerce sellers, many of which are located in China. But, after the UK’s departure from the EU, British companies will also need to comply.
‘Small and medium-sized businesses exporting to EU customers are set to face the biggest upheaval because of the changes, which remove VAT exemptions for SMEs and shipments not exceeding €22,’ wrote Oliver.
Having sought comment from VAT expert Richard Asquith, vp of Avalara (which specialises in tax compliance) for the article, who had just participated in a GCA Post Brexit Panel discussion to cover this very subject, when asked if he knew of any sectors who would be adversely affected, Richard mentioned greeting cards.
Having participated in the panel discussion, David Falkner, founding director of Cardology and GCA member was well placed to share his views.
David is quoted in the article as saying that “Brexit had “stunted” his company’s EU sales growth but he still planned to “overhaul his systems’‘ to comply with the bloc’s measures, which would cost his company a fifth of its EU revenues. “It’s a barrier but it’s a surmountable barrier,” he added.”
The FT piece concludes with comments from Amanda Fergusson, ceo of the GCA about how the changes would result in twin challenges of new costs as well as added complexity for small businesses. She added that several members that had been reliant on EU sales had stopped shipping to the bloc and expected the situation to deteriorate from July 1.
“My concern is that a lot of cottage industries, which have the potential to grow into something a lot bigger, will be scared off exporting,” she told the FT.
To read the article go to New EU VAT rules to cost British SMEs £180m in extra red tape | Financial Times (ft.com)
To help members, the GCA has a Brexit blog on its website which is being updated regularly as and when new developments come to light.
Boris Johnson boost for GCA Council members
At if it was not memorable enough to hold the first in-person GCA Council Meeting for over a year, to spot the Prime Minister Boris Johnson standing directly outside the meeting room door added to the excitement!
The GCA meeting took place at London’s Business Design Centre (home to PG Live) on Tuesday (May 18). While the venue is to be full of greeting cards in a couple of months’ time (27 and 28 July) when PG Live 2021 takes place, at present it is being used as a Covid vaccination centre.
The Prime Minister was there with selected members of the press to highlight the ongoing success of the vaccination programme and also mentioned how he was ‘cautiously optimistic’ that the June 21 would stick as the end of the restrictions roadmap.
Top: Boris Johnson giving the thumbs up about the vaccination programme at the BDC.