Well, what a week it’s been. And, no, for once I don’t mean in a good way. I just found out about the horrendous new legislation coming in from the EU on January 1st, compelling anyone who sells any digital services/products to work out and pay VAT to all 28 member states of the EU separately and according to who has purchased what from each country.
I really don’t want to get all bogged down with details here – this is supposed to be my ‘happy place’, but the more I’ve looked into it the more I see that compliance is not only going to be onerous, but the way things stand at the moment, completely impossible. The systems just don’t exist to enable individual sellers to do what they have to do in order to keep trading legally. There is a UK petition here for those of you who would like to have a look. It includes a summary too which outlines some of the problems. The adding of your signature would be hugely appreciated by myself and many others who find themselves quite shockingly and unexpectedly mixed up in this bureaucratic nightmare.
Here’s a great link you may want to read on Ysolde Teague’s Blog. She puts it so much better than I ever could. If you design and sell anything via email like I do then it’s a must read. If you love to buy craft patterns, eBooks, printable stationary, meditation courses, music – to name but a few – from any of us independent designer/sellers then I suggest you have a look too because if things don’t change significantly over the next few weeks there will be a lot of us closing down our beloved businesses before this legislation becomes law on New Years day 2015.
If you’ve read Ysolde’s post and the whole topic now has you intrigued, panicked, crying, having a nervous breakdown or just plain curious here’s another good source of information for you on Heather Burns Idea15 Blog. I don’t want to add to your dismay, but knowledge is power, after all.
Right, now that’s been said, let’s have some fun, because there’s only so much angst I can take at any one time.
(Takes deep, deep breath).
Here’s a little Christmas scene to cheer us all up. Well, it is December already! Not only have these tubby-tummied elves built their first snowman, but they’ve also managed to make a Christmas pudding and put their tree up. Wow, I need to catch up fast. I’ve seriously got to get my Christmas wiggle on!This is also the time of year when we try to make huge efforts in our otherwise very busy lives to see family and friends who live far away. It’s always so exciting to catch up face to face on a years worth of news or sometimes more. There’s nothing like a big hug, a bit of present swapping and a good chin wag to warm the very cockles of your heart! All the Facebooking and texting or even gossiping on the phone just can’t compare. My next few weekends are full of just such jaunts. Snow people love these kind’s of pre-Christmas shenanigens too. I don’t need to tell you how happy these guys are to have a good old get together. It’s written all over their faces 🙂 As well as getting together on their home continent on the perma-snow and ice of the arctic circle, they love to travel. As soon as southerly temperatures plummet into the minus numbers they start heading as far south as they can get. I expect you’ve seen them, magically popping up in parks and gardens near you, as soon as the first decent snowfall settles! I’ve had a few postcards from their jollies already that I’d love to share with you.
First the girls went on holiday exploring the forests in Canada…Then the boys decided a spot of skiing would be in order. Here they are in the French Alps…The baby snowmen aren’t big enough for all that wilderness trecking or alpine sporting but they do love to play together at their local ice rink.They’ve dressed up in all the different colours of the rainbow so their mum’s and dad’s know who’s who. Of course their mum’s and dad’s would never really get their own children muddled up but it can be a bit tricky to tell the difference when they’re skating around that fast. Here’s Mr. and Mrs. Snowdon with the triplets, Willy, Nilly and Milly, and of course not forgetting their new baby Billy.Awww, what a lovely Christmas they’re going to have with a houseful of smiling snowbabies. You can adopt some snowbabies here if you want to make your Christmas just as much fun. The pattern’s free and they don’t eat much (yarn) so you can afford to adopt as many as you like!
December 3, 2014 at 6:01 pm
Just a thought – doesn’t your turnover have to be over a certain amount before you have to register for & charge VAT? not sure if this would apply to the new regulations for digital businesses.
December 3, 2014 at 7:26 pm
Hi Jill, this is the big shocker – the EU have decided that there is going to be a zero earnings VAT threshold for digital sales, meaning I am liable for dealing with this whole sorry mess from the first 1 penny/cents worth of sales to an EU country. Apparently the thinking was that as Greece doesn’t currently have a VAT threshold then no-one should, so that Greece, and other countries with lower thresholds than the UK are not disadvantaged. It’s crazy beyond belief. I think I’m dreaming, but I’m not!!
December 3, 2014 at 8:52 pm
Oh no, really sorry to hear that. I have to do the VAT for our business (we r just a small business, me & my husband), it’s not too difficult, just a pain!! Hopefully customers will accept the vat element of your charges. Good luck 😊
December 4, 2014 at 8:48 am
Thanks for your support Jill, and your good luck wishes, I’m going to need them! You see, in order to pay the correct amount of VAT to each of the 28 separate EU countries I am required, by law, to collect irrefutable evidence (minimum two pieces that don’t conflict) on where my customers live/were when they ordered my pattern. Selling digitally and using PayPal does not routinely provide this information, though the Powers That Be are unable to grasp this. They simply do not know how digital selling or the internet, or PayPal, actually works.
Also 28 separate amounts of tax supplied to 28 member states tax authorities four times a year is a big and scary burden (there are 75 different VAT rates to wade through, all of which are subject to change at a moments notice) and I can be audited by any or all of these member states at any time if they feel they have cause for concern about my VAT methods.
I can apply for the HMRC MOSS scheme but then have to pay VAT on the digital and physical goods I sell in the UK (normally covered by the £81,000 turnover exemption) unless I can split my business distinctly for EU sales, UK sales and Rest of World Sales. Digital selling doesn’t work like that. The government is now saying that platforms like Etsy, Craftsy, etc. should be responsible for VAT collection. The platforms (often in the USA and not too inclined to become unpaid tax collectors for the EU) are disputing that.
It’s a huge, unworkable mess, badly thought out by those you would think should know better! Despite being registered with HMRC as an online digital crochet pattern seller, they have failed to tell me of the new obligations, and I found out, like 99% of other micro businesses, last week via social media. Deadline for implementation: New Years Day 2015!
>weeps gently into early morning coffee cup<
December 3, 2014 at 9:32 pm
so sorry to hear about all this red tape and interference from the EU in our simple trading transactions. It’s not as though you’re a multi-million pound organisation that can afford to pay someone to sort it through. I haven’t read the aforesaid blogs, but just wanted to say how much I love your family of snowmen and their adventures. The only thing I wish is that these ‘adorables’ were knitted so that I could join in the fun!
I wish you luck with all the bureaucratic nonsense and hope that something can be done so that people like yourself do not cease trading. You would be sadly missed
December 4, 2014 at 12:54 am
Aw thanks so much Rina for your kind words. I’m certainly not a multi million pound organization, and never likely to be, but I don’t mind that because I love what I do. One of my plans for next year was to translate some of my patterns into knitting patterns (knitting was my first love!) Hopefully things will work out and I’ll find a viable way to still be in business come the new year and then you can enjoy making some knitted snowmen next Christmas!
December 4, 2014 at 9:02 am
Oh Janine sorry I didn’t realise how complex it all is – don’t think I’ll moan again about the work I have to do for our VAT!!! I really feel for you and hope you will be able to find a way to carry on with your beautiful work – best wishes xx
December 4, 2014 at 1:11 pm
I’ll find a way, eventually, no matter what it takes. At least I’m not alone in all this. There’s huge support out there because so many of us are in this same dreadful, leaky boat. Pressure groups are really getting going now, ramping up the efforts and kicking up a stink. There may be a revolution yet! Watch this space… x 😉 x
December 4, 2014 at 3:59 pm
I’ve signed your petition Janine, and really feel for you in having to deal with all of this 🙁
I used to have a tiny business on eBay, just selling the books I didn’t want any more, so I could buy new ones, but had to close down my little shop over a similar issue, so I know how horrible it can all be 🙁
I really hope you’ll be able to sort it all out, as I’d hate to miss out on buying your wonderful patterns (there’s still quite a few I haven’t bought yet, too)!
December 4, 2014 at 7:43 pm
Thank you for taking the time to sign the petition Katy. I appreciate it. There has to be sensible way around this. I absolutely hate having to play the waiting game though. I’m a do-er and like to have immediate results! I’ll definitely be keeping the blog going, no matter what. I’ve got another cute little free pattern to go on here soon. At least the clueless EU bureaucrats can’t stick their oar in and spoil that! (Can they???!!!)
December 25, 2014 at 3:42 pm
I signed the petition. What a logistical nightmare to do. How can they think that this wouldn’t cause huge problems for small businesses?
December 25, 2014 at 4:34 pm
Thank you for signing Theresa. I know, it’s unbelievable that the powers that be just haven’t thought this through at all. I’m still hoping for a ‘Christmas miracle’ maybe in the form of a last minute reprieve for us small businesses, or at ;east a suspension while some of the more unworkable details are ironed out. We’ll just have to wait and see what the new year brings…