It’s the start of a new month, so, what new developments have there been?  

VAT in the Digital Age (VIDA) proposals approved

The European Union has reached a conclusion to its landmark negotiations regarding VAT in the Digital Age (VIDA) proposals. 

On the 5^th November 2024, The Economic and Financial Affairs Council (ECOFIN) of the EU agreed to adopt all three ‘pillars’ of the VIDA proposals, which cover:

• Digital Reporting Requirements (DRR)
• Platform Economy regulations
• Single VAT registration scheme

The development follows several previous discussions which often resulted in numerous disagreements, such as the veto applied by Estonia earlier this year.  

The Hungarian Minister of Finance stated that ‘[a]fter almost two years of negotiations, the Council has reached an agreement on the VAT package. This is a cornerstone for the digital transition and a significant step in improving the competitiveness of the EU. The new rules will update our VAT systems to reflect the digitalisation of our economies, help combat VAT fraud, and ease administrative obligations for small companies and individual service providers. Today’s decision was preceded by intense discussions led by the Hungarian presidency; thus, we are grateful to all delegations for their constructive approach and hard work’. 

Under VIDA, the new measures introduced by the three pillars will mean that:

• VAT reporting obligations concerning cross-border transactions will become fully digital by 2030
• Operators of ‘gig economy’ platforms providing accommodation and/or transport will be subject to VAT rules
• The existing One-Stop-Shop programme will be expanded to limit the need for multiple VAT registrations across EU Member States

Further details regarding implementation will be announced as the EU begins to implement the new measures.

Amazon Haul launched – a low-priced alternative to competing platforms

Amazon’s new storefront ‘Haul’ launched in the United States on the 13^th November 2024, in an attempt to diversify its offerings amidst heavy competition from low-priced competitors such as Temu and Shein.  

All products under the ‘Haul’ storefront are available for $20 or less, with Amazon stating that most products listed so far are under $10.

The new storefront is available to customers in the United States now using this link, or by searching ‘Haul’ in the standard Amazon storefront.  

Amazon Haul includes more than 700 different categories of goods, with a focus on three specific categories: fashion, household items and daily essentials. 

Sellers who wish to take part in the Amazon Haul initiative must receive an email invitation from Amazon in order to participate.  In addition to the invitation requirement, all listings must comply with the following rules:

1. Only products in new condition can be listed
2. All products must be listed without brand names
3. Products stored in Amazon fulfilment centre cannot exceed 1 pound in weight and 14 x 8 x 5 inches in size
4. The product cannot be classified as dangerous goods
5. The product cannot contain batteries
6. The product cannot be eaten (e.g. food) or used on the skin
7. Products must comply with import guidelines, export guidelines and trade policies. Currently, low-price product stores do not accept products that require additional documents to meet cross-border compliance requirements
8. The product ASIN and SKU must be unique to the low-priced goods store. The same ASIN and/or SKU cannot be used on the main Amazon.com storefront and Haul simultaneously

Amazon have stated that the storefront is currently in beta, and may be subject to further changes depending on seller and customer feedback.

HMRC adjusts interest rates for late payments in response to the Bank of England’s base rate cut

HMRC has announced that its late payment interest rates have been revised following the Bank of England’s decision to cut the base rate of interest from 5.0% to 4.75%.

The newly revised rates will be rolled out imminently and will apply from the following dates:

• 18 November 2024 – for payments made by quarterly instalments
• 26 November 2024 – for payments made by non-quarterly instalments

HMRC late payment interest rates are tied to the Bank of England’s base rate of interest. 

The current calculation methodology stipulates that the late payment interest is calculated at the base interest rate, plus 2.5%.  On the other hand, repayment interest is set at the base rate minus 1%, with a lower limit (‘minimum floor’) of 0.5%. 

The newly published rates are as follows:

• Late payments: 7.25%
• Repayments: 3.75%

HMRC has stated that ‘[t]he rate of late payment interest encourages prompt payment and ensures fairness for those who pay their tax on time, while the rate of repayment interest fairly compensates taxpayers for loss of use of their money when they overpay’.