Those selling through bandcamp etc etc......... EU VAT

[Guest Jecklin]

Thought I'd see what the opinion and consesnus is on Basschat.


On an quiet evening shift at work tonight and came across various articles on the internets about Changes in EU law in regards to VAT and selling downloads which takes effect on January the 1st.

I won't go into detail - there are loads of blogs from many self employed people outlining various aspects of it.
STeve Lawson talks about it here for example:
[url="http://www.stevelawson.net/2014/11/selling-downloads-of-your-music-in-the-uk-read-this/"]http://www.stevelaws...e-uk-read-this/[/url]

The latest news I could pick up on tonight, bearing in mind HMRC themselves have not got a clear idea, is thus (I'm assuming you are not already VAT registered):

Bandcamp take absolutely no repsonsibility of VAT.
One is therefore advised to assume responsibility yourself despite both bandcamp and paypal appearing as "portal" in the transaction which in theory absolve you.
You therefore have to register withe the HMRC for VAT with this MOSS system (which is how you pay to the EU).
You will submit a UK nil return to the HRMC as you are below the £81K vat limit, but you then submit and pay the EU VAT on all your EY downloads.

Until 7 hours ago I'd never even heard of this new ruling.

I would expect to make about £20 tops through non-UK EU sales on bandcamp in the next year simply because I don't play in Europe and and have zero publicity, so anyone that comes across my music is purely a happy accident.

I will not be going through any of this faff on a maximum EU turnover of twenty quid (EU VAT submission of about £5)

So do I just ignore it as I would have been doing in blissful ignorance had I been busy at work tonight or try and find a different UK only platform to sell music through?

Bandcamp have no provision for limiting where you can sell to.
If they did and I could tick a box and only have my stuff available to buy in the UK I'd happily tick it.

Your thoughts.

Cheers
Thomas

Edited November 30, 2014 by Jecklin

[Guest Jecklin]

Oh I'll just add - Initially it seemed that by selling through Bandcamp you were not bound by this new legislation.

However from what I've gleaned over the past few hours this now does not seem to be the case.

[taunton-hobbit]

Mmm - I've had a couple of Vat registered businesses, but I'm no expert. As a supplier, you usually have to have a gross turnover (sales) of quite a few thousand pounds before you need to get involved in this sort of thing. If you don't have an accountant, find one locally who will give you, as a prospective client, up to an hour free (ask first!) - this is quite normal nowdays & will probably put your mind at rest..........


Edit.....talk to an accountant - this stuff looks new/odd and you really do need to have a conversation with someone who knows the ground rules....I wonder if this applies to book / mp3 downloads like Kindle/Amazon, if so, it's a whole can of worms...................

Edited November 30, 2014 by taunton-hobbit

[Guest Jecklin]

Hi Taunton-hobbit,

If this was UK only then exactly as you say you'd need gross turnover over £81thousand.

In the EU there us no minimum turnover for downloads apparently.

[Jean-Luc Pickguard]

The change in legislation is that from 1st January 2015 when you sell digital services such as mp3s, videos, ebooks, downloadable software in the EU etc the VAT that applies is that in the country of the buyer, not the seller.

The £81K threshold we enjoy here in the UK that means anyone selling their stuff perhaps as a sole trader as a side gig will now have to register for VAT in the UK and also register in every EU state they sell to or signup for called the Mini One Stop Shop service (MOSS) that helps them sort out the EU VAT. If you're selling downloads on your own site and someone in Germany buys a 99p MP3 you're stuffed unless you ignore the VAT aspect and risk an unlimited fine.

Rachel Andrew expains what's going on at [url="http://rachelandrew.co.uk/archives/2014/10/13/the-horrible-implications-of-the-eu-vat-place-of-supply-change/"]http://rachelandrew.co.uk/archives/2014/10/13/the-horrible-implications-of-the-eu-vat-place-of-supply-change/[/url]

Isabel Zinaburg has started a petition to call for Vince Cable, Secretary of State for Business, Innovation and Skills, to intervene and uphold the existing VAT Exemption Threshold for businesses supplying digital products. Please sign it if you think the changes are a bad idea. [url="https://www.change.org/p/vince-cable-mp-uphold-the-vat-exemption-threshold-for-businesses-supplying-digital-products"]https://www.change.org/p/vince-cable-mp-uphold-the-vat-exemption-threshold-for-businesses-supplying-digital-products[/url]

You need to keep detailed records on each purchaser including a billing address and IP address and check that the geographical location matches before making the sale. The records need to be stored for up to eleven years and this may mean that businesses need to register with the Data Protection Commissioner.

HMRC held a twitter Q&A which is archived at: [url="http://www.mynewsdesk.com/uk/hm-revenue-customs-hmrc/blog_posts/eu-vat-changes-twitter-q-a-31555"]http://www.mynewsdesk.com/uk/hm-revenue-customs-hmrc/blog_posts/eu-vat-changes-twitter-q-a-31555[/url] I though a possible solution for me might be to block non-uk EU sales, however the Q&A flagged up that this may fall foul of anti-discriminatory laws.

This nonsense was brought in to stop companies charging 15% luxembourg VAT in countries where the VAT can be as high as 27%, but it is affecting many thousands of sole traders and small companies who can no longer sell on their own websites and will need to use a 3rd party site who will take care of all the VAT - like amazon.

The VATMOSS portal has been tested by four people and after completing thir assessment we have concluded the VAT Mini One Stop Shop service should not be given approval to be a live service on the HMRC portal: [url="https://gdsdata.blog.gov.uk/vat-mini-one-stop-shop-service-assessment/"]https://gdsdata.blog.gov.uk/vat-mini-one-stop-shop-service-assessment/[/url]

Edited December 1, 2014 by Jean-Luc Pickguard

[Guest Jecklin]

That's the size if it Jean-luc.

It's a mess and there will be many many people selling through bandcamp for example who know nothing about it. I can't see there will ever be enough people signing the petition to have any effect over the next 31 days.

[Jean-Luc Pickguard]

I think a lot more people that this would affect would sign the [url="https://www.change.org/p/vince-cable-mp-uphold-the-vat-exemption-threshold-for-businesses-supplying-digital-products"]petition[/url] if they knew it would affect them, but anyone selling a few cost MP3s on their own web site - or ebooks, knitting patterns etc using WordPress with Easy Digital Downloads or any other self-hosted system is unlikely to have checked EU VAT regulation so will only find out about the changes and realise that this flustercluck applies to them if they come across something about it on a forum or social media.

Edited December 1, 2014 by Jean-Luc Pickguard

[Steve Lawson]

Bandcamp have clarified what they're doing with it - basically given us all the info we need to give the VAT man if we go that route, but also transitioning as quickly as possible to being able to pay the VAT so we don't have to...

here's my take on it - http://www.stevelawson.net/2014/12/bandcamp-and-the-new-eu-vat-law/

Steve