You know how sometimes you realise you are a devious little sod? I blame too much roleplaying.
I have read in several places, though without links to HMRC, that a digital backup offered alongside a physical product is exempt. Strictly speaking:
- Nobody is ever, ever going to check whether Monterey Jack is actually posting hard copies of his scenario Horror in Harrowgate to backers.
- More legally, there is no reason why he would need to post them. Buyer collects is a well-established business model.
- Logically, Monty can sell buyer-collects hard copies of Horror in Harrowgate to buyers worldwide. If they never collect, thatâ€™s their problem. However, having bought the item they are eligible for the free backup.
Iâ€™m also not clear what happens with free gifts. For example, letâ€™s say I implement a Buy Me A Cup of Tea scheme. Well-wishers can buy me a cuppa for Â£5.99, and as a token of thanks, they will receive a special free gift (as it happens, my scenario Shoggoth in Shunjuku). This is a well-established tactic for getting around ticket reselling rules: â€œArsenal scarf for sale: Â£80. Comes with special bonus gift (row D seat 19)â€ except it also gets around the physical delivery aspect. I see no reason this would not be acceptable.
Thirdly, the main problem appears to be non-UK EU sellers. Banning non-UK EU sales is potentially a substantial loss and may even be illegal due to the EUâ€™s own rules (I suspect not, but Iâ€™ve seen it muttered about). However, you could potentially implement this business model, though the address-collection admin may still apply:
- UK buyers and non-EU buyers can buy the digital product as normal.
- EU residents cannot buy anything, but are eligible to become patrons of your website. Patrons get a gold star on their name in the forums, a thank-you on a dedicated page, and a 5-minute Skype consultation with you â€“ this is not a digital service because lalalalala I donâ€™t understand this Internet thingy please go away (to paraphrase). As a gesture of thanks for their support, you allow them to access your archive of scenarios.
This would allow EU people to still actually use your stuff, while not paying for it as such.
Fourthly, I foresee a growth in the following:
- Hans in Hannover wants a copy of Horror in Harrowgate and mentions this innocently to his friend Eric of Edinburgh.
- Eric buys the PDF, but decides he doesnâ€™t want it. He passes it on to Hans, who generously offers him the full retail value. Eric contacts Monty, who moves the unique scenario purchase into a new account set up for Hans, in the usual way for gifts. Hans has made no purchase from Eric and no VAT is liable.
- As far as I can tell, even if Eric starts doing this for random people on Twitter, Monty is unaffected. Eric is providing a personalised service, which is also exempt.
Fifthly, Monty canâ€™t risk selling PDFs from his website Weird Stuff I Saw Once because of the VAT implications. However, Monty can accept donations from well-wishers. Cheddar George, his old friend, can write scenarios and make it known that out of sheer good-heartedness, he will send a free copy of the scenario to anyone who donates Â£5 to Montyâ€™s website.