What's actually going on with the VAT thing?

PasturesNew

This affects article writers too.

If I were to wake up tomorrow morning, with the ability to write in foreign languages and if I were to then start writing articles on websites around the EU, with those websites paying me a revenue share from the advertising, then I am selling a service abroad and so would need to register VAT. I wouldn't be paid VAT/any more for my writing/share of income, so would, in effect, be paying out VAT from the meagre income that this activity draws.

Is that so? It sounds correct under the new rules from, certainly, 2016.

It's a good job I don't write on EU sites.... or do I? Maybe I don't know. Maybe I've now a new responsibility to ask the question, in such a way that it's answered correctly.

Brooker_Dave

Perhaps we should all start giving the Germans 20% of our turnover just to be on the safe side?

EU arrest warrants and all that...

soolin

Brooker_Dave wrote: »

Perhaps we should all start giving the Germans 20% of our turnover just to be on the safe side?

EU arrest warrants and all that...

I have a horrible suspicion that our thoughts and worries are beginning to merge, but better make it a tad higher than 20% surely- just to be on the safe side as there are bound to be additional costs associated with collection that we hadn't taken into account?

I do love conspiracy theories and predictions and stuff- and note that a couple of high profile predictors are suggesting that 2015 is the year that the Germans might start to disentangle themselves from the whole EU debacle. I can't see it happening, but it certainly makes for an interesting read.

RFW

Brooker_Dave wrote: »

But we can vote useless governments (not that we do) out.

Well we're 4 and a half years into a government that no one voted for. The problem is we usually get governments that more than half the population never voted for, there isn't that much difference with Europe, if anything it's slightly more democratic.

I'm in favour of staying in Europe, mostly because I've just had all my Amazon listings translated into 4 languages and they're doing quite well;)

Brooker_Dave

But what happens when you have to employ 28 accountants just to be able to trade to our European bretheren?

ballisticbrian

We'll also join the list of those who will cease trading with Europe on that date.

RFW

Brooker_Dave wrote: »

But what happens when you have to employ 28 accountants just to be able to trade to our European bretheren?

It sounds like a good time to become an accountant.
It's not too dissimilar to how it works in the USA. Each state having different rates of purchase tax. I've been looking at using fulfillment centres in the US, you have to charge tax based on where the goods are shipped from, each state has a different purchase tax rate. It's bonkers. Governments work on pre internet legislation that often hampers cross border trade.

Unfortunately the current change in legislation is not something the public will be particularly interested in. The fact that someone who earns a tenner a month selling a download of a hobby book will probably give up because of all the accounting he'll have to do, is of no interest to most people.

I've always thought the VAT on downloaded books is quite ridiculous compared to their printed counterparts. Whatever our feelings on printed versus digital, the fact that a book printed on paper should carry no VAT and one that is not is crazy. No one seems to ever complain about it, if VAT was introduced on printed books then there'd be outrage. T

JasonLVC

That Telegraph article is a poorly written, overly sensational dollop of scaremongering.

A UK business under the £81k VAT threshold selling e-services (ebooks, app downloads, software downloads, etc) will need to register for UK VAT even if their turnover is less than £81k....however, the business does not need to file a VAT return for UK sales, only its EU sales.

There are no commitments to introduce the rules for physical goods in 2016, there are already rules for physical goods (distance selling regulation rules).

The changes are mainly designed to attack Google, Apple and other corporates who sell their digital wares in the comfort of a low VAT country like Luxemburg...under cutting every other small business and meaning the UK and other EU countries miss out on the VAT that would have been charged if the goods were physical.

The changes mean a business doesn't have to register for VAT in 28 member states, it only needs one VAT registration. No need for 28 accountants, problem is the article is written solely to create hysteria rather than actually explain the whys and hows.

By all means lobby the government, but as this is an EU law which over rides UK domestic law, then the protests need to be directed to Brussels and your MEP's, not Cameron....as this law was advertised about 2 years ago in advance, then the telegraph article is also a bit late to the party.

JasonLVC

PasturesNew wrote: »

This affects article writers too.

If I were to wake up tomorrow morning, with the ability to write in foreign languages and if I were to then start writing articles on websites around the EU, with those websites paying me a revenue share from the advertising, then I am selling a service abroad and so would need to register VAT. I wouldn't be paid VAT/any more for my writing/share of income, so would, in effect, be paying out VAT from the meagre income that this activity draws.

Is that so? It sounds correct under the new rules from, certainly, 2016.

It's a good job I don't write on EU sites.... or do I? Maybe I don't know. Maybe I've now a new responsibility to ask the question, in such a way that it's answered correctly.

Advertising is not a digital service. The changes relate mainly to electronic downloads.

Google plus/click throughs/advertising revenue is an indirect service where the place of supply rules aren't changing.

If you were to offer .pdf downloads of your articles for which the hosting website gives you a cut of sales, then that would be different as the website is offering an e-book in effect, which would be caught by these rules.

ballisticbrian

Jason, sometimes the competitive edge a small trader has can just be in that 20% VAT. Sometimes a trader only has an edge because of the postal service they use. Margins are very tight. I expect the MPs (or MEPs) have their heads so far up their own !!!'es that they think small business means turnover of 500,000 and we'll just get our accounts to sort it all out.