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Removal of Paid-For Electronic Downloads/Services: January 2015


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#21 Paddurz

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Posted 05 December 2014 - 05:21 AM

As far as I have understood it, it's not the UK VAT that is the main issue. The major problem is that if your customer is located in Germany (even if your internet shop is located in the UK) you have to pay German VAT on that particular sale. Also, the issue is how to confirm or understand which country your customer is located in.

It's right sorry mess indeed. And due to the fact you have to pay VAT in the customers country you'd have to have full understanding of each country's VAT code and levels, including exemptions. To be fully versed in the tax code of all the countries in the EU is nigh on impossible for a small businesses.

Again we can the EU for another idiotic scheme.

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#22 Shimmin Beg

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Posted 05 December 2014 - 06:04 AM

Some goods and services are outside the VAT tax system so you can’t charge or reclaim the VAT on them. For example, out of scope items include:

  • goods you sell as part of a hobby - like stamps from a collection

Now does register voluntarily mean that you don't have to claim it if you want it's voluntary?

 

As always, disclaimar; IANALBIWAL :)

Spoiler

 

It would be nice, but unfortunately, my reading says no on both counts.

 

The 'hobby' disclaimer looks very much to be aimed at hobbyists specifically, rather than sellers.  I'm 99% confident that their meaning here is that collecting-trading hobbies, like stamp or football card collection, are not covered.  Here, exchange and sale of items is an intrinsic part of the hobby.  In contrast, RPGs are not about trading items; rather, some people ("merchants" essentially) sell rulebooks, scenarios and other materials to hobbyists.

 

Sedley, who is currently selling SIZ 100 of CoC merchandise via the forums, is probably covered, although even there I'm not entirely sure.  But the talk is all of them as collectors' materials and it seems okay to me.  However, I don't think they would for a moment accept YSDC or DTRPG's sales as being part of a hobby.  In fact, I think it would be very difficult to convince them that any digital content falls under that exemption, because digital stuff is almost always copied rather than traded - there's no rarity element and typically you can't transfer ownership from one person to another.  But that's by the by.

 

Voluntary registration is this:

You don't normally have to register for VAT in the UK unless your turnover is £81k or more, as this is the threshold where you normally pay it

You can voluntarily register despite being under the threshold - this has some accounting or legal value, but I don't know about it. 

Spoiler

 

However, other countries generally have much lower thresholds or none.  Thus, as soon as you sell anything at all to other EU countries, you now must register for VAT with that country or with the VATMOSS scheme (which lets you deal with one entity rather than every country individually).  It's not yet clear to me whether you also need to collect customer location data even if you're only selling within the UK!

 

So no, it's not a simple matter of deciding not to collect and pass on VAT... otherwise nobody would.



#23 Lisa

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Posted 05 December 2014 - 06:45 AM

Okay, so -- which files on this site are we talking about? Could you give me a few examples? Are we talking anything someone puts on this site for free? Are we talking only things that cost money?

 

From a practical consumer point of view, what do I need to grab and download, and what is likely to stay?

 

I'm sorry if this is obvious to folks, but... I'm very, very confused.


Edited by Lisa, 05 December 2014 - 06:46 AM.


#24 Shimmin Beg

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Posted 05 December 2014 - 06:51 AM

Okay, so -- which files on this site are we talking about? Could you give me a few examples? Are we talking anything someone puts on this site for free? Are we talking only things that cost money?

 

From a practical consumer point of view, what do I need to grab and download, and what is likely to stay?

 

I'm sorry if this is obvious to folks, but... I'm very, very confused.

 

Free stuff isn't a purchase, so VAT isn't relevant, whether Paul or someone else provides it. 

 

Paul has confirmed that Patron materials are also unaffected, since nobody is buying these.

 

As I understand it, the only issue is Innsmouth House Shop digital items: Fungi from Yuggoth, The Many Deaths of Edward Digby and suchlike, and direct-purchase banner ads.  Hard copies are unaffected.



#25 Lisa

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Posted 05 December 2014 - 06:55 AM

So... basically, digital items found in the Innsmouth House shop? Anything else?



#26 Shimmin Beg

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Posted 05 December 2014 - 06:59 AM

So as not to clutter this thread even more than I already have, I have put some musings on my blog.  Do not treat as legal or financial advice, please, but they might be worth investigating if you do sell files online.



#27 wombat1

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Posted 05 December 2014 - 04:47 PM

However, other countries generally have much lower thresholds or none.  Thus, as soon as you sell anything at all to other EU countries, you now must register for VAT with that country or with the VATMOSS scheme (which lets you deal with one entity rather than every country individually).  It's not yet clear to me whether you also need to collect customer location data even if you're only selling within the UK!

 

So no, it's not a simple matter of deciding not to collect and pass on VAT... otherwise nobody would.

 

This still doesn't answer the question regarding non-EU countries.  I understand that if someone in the United States ships a physical item to Europe, the tax is going to be collected by the customs or postal authorities when it arrives.  But a pdf or electronic item doesn't do anything of the sort, so how does the European Union plan to collect?  In the absence of a tax treaty (and I am not finding one) there would be no obligation to collect on the part of the merchant, and it seems an infringement on the liberty of the citizen to intercept their electronic communications to collect from them.



#28 DadsAngry

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Posted 05 December 2014 - 05:02 PM

From what I read I believe the seller has to keep records of the VAT that they charge for each item and then make payments to HM Revenue and Customs’ (HMRC) bank account by the deadline shown on your VAT return.
 


#29 yockenthwaite

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Posted 12 December 2014 - 01:14 PM

In the last couple of days HMRC have clarified that where there is a non minimal human intervention in the supply of the digital goods e.g. emailing a PDF, or otherwise manually enabling an order, it doesn't come under the new rules and VATMOSS doesn't apply. I don't know if this might be a get out clause enabling Yoggie to continue selling PDFs. Anyway it's got me out of trouble with my own £6 PDF which I take payment for by PayPal and supply manually by email afterwards. I will be able to sell it after 1st January without hassle.

For the new guidelines about this see https://www.gov.uk/g...tional-guidance

Edited by yockenthwaite, 12 December 2014 - 01:14 PM.


#30 PoC

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Posted 12 December 2014 - 02:24 PM

I'm glad the clarification in the rules is a help, Viv.

 

Alas, our situation remains the same I'm afraid. I've spent a fair amount of time and effort trying to reduce administration!



#31 PoC

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Posted 24 December 2014 - 11:28 PM

In preparation for next week, the last of our buyable digital products have now been removed from sale.

 

On a better note, I hope everyone is having a good holiday break!



#32 tgaitskell

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Posted 25 December 2014 - 12:16 PM

Indeed, Merry Festive Season to thee and thine, fine and noble sir!



#33 PoC

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Posted 27 March 2015 - 05:12 PM

I've now been made aware that there are plans to extend this law to also cover the sale of physical goods online from January 2016.

 

This being the case (incept date yet to be officially confirmed), then this year (2015) will be our final year of selling goods through YSDC, so if you want any physical products from us then 2015 is the time to get them!

 

As such, The Long Con is now on general sale if you want to pick up a copy (very limited copies available right now as we're holding some back for UK Games Expo).



#34 jlynn

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Posted 27 March 2015 - 06:22 PM

I've now been made aware that there are plans to extend this law to also cover the sale of physical goods online from January 2016.

 

This being the case (incept date yet to be officially confirmed), then this year (2015) will be our final year of selling goods through YSDC, so if you want any physical products from us then 2015 is the time to get them!

 

As such, The Long Con is now on general sale if you want to pick up a copy (very limited copies available right now as we're holding some back for UK Games Expo).

 

You have to wonder what genius of an economist could possibly think driving small businesses to shut down and go out of business is likely to somehow improve revenue.  But, whatever, I guess....



#35 Buchhalter

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Posted 27 March 2015 - 07:46 PM

The geniuses are in the European parliament and they did not consider small business.

#36 jlynn

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Posted 27 March 2015 - 10:37 PM

Hmmm.  Thought the British government wasn't that keen on the European experiment thing.  And as far as not considering small business, or real people for that matter...obviously!  ;-)



#37 GBSteve

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Posted 27 March 2015 - 11:55 PM

In slightly more encouraging news, Patreon handles VAT MOSS for you.


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#38 WinstonP

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Posted 28 March 2015 - 03:12 AM

I suspect I'm not the first person to make this joke, but wasn't the VAT MOSS the evil slime in Barbarella?


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#39 Shimmin Beg

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Posted 28 March 2015 - 12:23 PM

For those generally curious about VATMOSS, some updates here: https://www.enterpri...ate-on-vat-moss

 

Some highlights:

 

 

* Guidance will clarify how a business can register voluntarily for VAT, and then for VAT MOSS, without having to charge VAT on its UK sales (i.e. the new arrangements do not threaten the UK's current high VAT registration threshold);

* Registering voluntarily for VAT will only involve filing a quarterly 'nil' return - it is only the VAT MOSS return that then needs to be completed to reflect cross-border trade in the quarter;

* When it comes to record-keeping, small businesses will only have to collect and keep two pieces of data;

 

In addition, HMRC will allow businesses who use payment service providers:

a) to ask the customer in which Member State they are resident at the point of sale; and subsequently
B) to review data provided by the payment service provider (normally billing address and Member State where bank or credit card is registered)

Provided the above tallies and the business records this information, that is all the business will need to do. HMRC confirmed that payment providers are working to ensure this happens as seamlessly as possible;

 

I noted something in GBSteve's link suggesting that one reason for all this is that the USA and Canada have for years forced something similar (FACTA) on other countries, and now the EU is reciprocating.  Murky waters.


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#40 PoC

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Posted 28 March 2015 - 04:00 PM

In slightly more encouraging news, Patreon handles VAT MOSS for you.

 

Interesting. Like Etsy their first response was to ignore it saying "it's none of our concern", but also like Etsy they've since... changed their mind... I wonder how long DriveThruRPG will hold off? At least that means The Cthulhu Breakfast Club Patreon will be sorted out (sans 20% + processing fees).

 

I really wish there was a way to stop b + ) from turning into a smiley!

 

Uncheck the Enable emoticons Post Option when making a post. :-)