Alarming New EU Legislation Concerning VAT Effective 1st January 2015

19 Comments

  • Steven Spiller

    Reply Reply December 3, 2014

    Hi Richard,

    I would add that this is also something to link to:
    https://www.change.org/p/vince-cable-mp-uphold-the-vat-exemption-threshold-for-businesses-supplying-digital-products

    Going to need to check this, but is the answer to use places like ClickBank, etc to sell everything through? As ClickBank already collect and remits VAT to EU purchases, this would seem to be down to them instead of the individual seller. Could be a very good thing for them…

    Although it will appear that we (as creators) may make less by using ClickBank, the time gained by not having to deal with the crazy EU VAT situation is probably worth more than the loss.
    Steven Spiller recently posted…My First WordPress Plugin!My Profile

    • richard gm taylor

      Reply Reply December 4, 2014

      Hi Steven,

      Thank you for you comment and link giving more information about this complex situation. I agree with your comment about ClickBank and working with them to avoid the hassle, but I’m sure the likes of JVZoo will not want to lose customers and will try to find a way around this…I think it a question of watching this space for a while before making a decision on how to deal with this…

      Cheers,

      Richard

  • Paul Wallace

    Reply Reply December 11, 2014

    Hi Richard,

    Yes this is a very demanding time and a worry for many of us, although I believe the effort and cost required to investigate small fish would not be worth the cost and time! That said, we all- I am sure want both an ethical and lawful business.

    I have done a little reading on this and believe for someone like myself who’s intentions are to create products, how to guides and training courses for people basically who want and are doing what you are right now in business, there is no need!

    How this works is if you create you product and market it for another business then the transaction is Business2business and the new rules do not apply, it is only when a business produces a product for the consumer market that you would need apply the changes.

    If you are producing for the consumer market then you should read this:https://www.gov.uk/register-and-use-the-vat-mini-one-stop-shop
    I guess a niche like health and fitness would apply here rather than marketing or business advice businesses

    Now that all said, I have only done some light reading and as you rightly said Richard “due diligence” is the order of the day.

    Kind Regards

    Paul Wallace
    Paul Wallace recently posted…How YOU can insert a PDF into your WordPress Blog or WebsiteMy Profile

    • richard gm taylor

      Reply Reply December 12, 2014

      Thank you Paul, however, I’m not sure how us as the owner and seller of the product can distinguish between the buyer as another business or ordinary consumer…

      Richard
      richard gm taylor recently posted…Alarming New EU Legislation Concerning VAT Effective 1st January 2015My Profile

      • Paul Wallace

        Reply Reply December 13, 2014

        Hi Richard,

        I guess what I am saying here is because I have not sold a product as yet (I am registered with HMRC) I am nowhere near the VAT threshold; I really do not see this a worry in the very short term but understand MOSS as much I need to for now and the importance of watching this space.

        Secondly from a legal point of view, I am saying that if I market and prepare my sales copy to reflect that my product is for a business (which they will)then the rule is not legal in my circumstance. Remember I am not claiming to be an expert, just how in the short term; how I see and will deal with it.

        Lastly, as a teacher of business ethics I understand something needs to change with regards to how some global organisations avoid paying, Tax but in my opinion this a terrible idea!

        So, once again Richard Thanks for this great post and thanks for the input from others here as this is indeed a learning curve that I will be following.
        Paul Wallace recently posted…How YOU can insert a PDF into your WordPress Blog or WebsiteMy Profile

  • Sue Worthington

    Reply Reply December 12, 2014

    I have done a LOT of research on this for several months now

    First of all there is an excellent group here
    https://www.facebook.com/groups/DigitalVAT2015/
    which I highly recommend you join

    Next there is a video here which gives us a ‘get out’ and seems legit and certainly applies to all my products
    https://www.youtube.com/watch?v=TDLwke2XlKo
    This is confirmed in the latest official EU VAT release
    https://www.gov.uk/government/publications/revenue-and-customs-brief-46-2014-vat-rule-change-and-the-vat-mini-one-stop-shop-additional-guidance/revenue-and-customs-brief-46-2014-vat-rule-change-and-the-vat-mini-one-stop-shop-additional-guidance

    Thirdly banning EU users can be considered discrimination apparently!

    You should be able to distinguish between a B2B and a B2C because all EU businesses no matter the size have a VAT number which JVZoo will now be asking for.
    However JVZoo have no intention to become another Clickbank style seller BUT they have put a lot of new reports in place to collect the required information.

    Finally Richard I am not sure I understand this —

    “Update 12.12.2014: I now understand that because the payment comes from the vendor’s PayPal account, they are legally the seller of the product and not you as the product owner. So, whilst you are protected by this nuance, the vendor is not and may need to change their payment structure in order to comply”

    Can you explain what you mean there for me please? Sorry to be thick there!

    Sue
    Sue Worthington recently posted…Do You Have A Plan For Social Media for 2015 – Part 1My Profile

  • richardgmtaylor

    Reply Reply December 12, 2014

    Hi Sue and thanks for your comprehensive comment…you seem to be way ahead of me on this, which is understandable since you are more directly effected by this (I am not selling anything yet):-) Ref my update, my original understanding was that JVZoo distributed the proceeds of the sale in such a way that they were merely acting on your (the vendor’s) behalf and you were identified as the vendor within the PayPal payment system. I now understand that this is not true and that JVZoo is identified as the vendor in these transactions. Maybe, from what you are saying, I am wrong on this and maybe even both counts Your clarification would be much appreciated…I’m sure it is me being thick, not you:-)

    Richard

    • Sue Worthington

      Reply Reply December 12, 2014

      Richard you are correct in that the vendor of a product on jvzoo is the one responsible for the collection of VAT because of the way in which they (jvzoo) disburse payments. The vendor being the product creator who puts their product on jvzoo

      I think it was me not understanding your phrasing of your update – it is pretty confusing!

      Technically I am wondering whether they (jvzoo) are indeed classed as a platform in that they distribute the product for us but they insist they are not.
      I don’t know what HMRC would interpret it as 🙂
      Sue Worthington recently posted…Do You Have A Plan For Social Media for 2015 – Part 1My Profile

  • Sue Worthington

    Reply Reply December 13, 2014

    Haha Richard – I didn’t mean you were confusing – the whole bloomin thing is a total confusing mess 🙂
    But we could keep this post alive as we hear updates – its a good reference point

    And I can let you know which way I decide to go

    Sue
    Sue Worthington recently posted…Do You Have A Plan For Social Media for 2015 – Part 1My Profile

  • richard gm taylor

    Reply Reply December 13, 2014

    Thank you again Sue and of course I’m happy to keep this post alive with any additional information I may come across and look forward to your “way I decide to go”

    Richard
    richard gm taylor recently posted…Alarming New EU Legislation Concerning VAT Effective 1st January 2015My Profile

  • igor Griffiths

    Reply Reply December 18, 2014

    Hello Richard

    The more you read about this the more confusing it gets.

    Having just de-registered my contracting company from voluntary VAT registration as I am no longer contracting (you get a slice of the 20% VAT as a reward for collecting VAT) and because the paperwork was a nightmare, my accountant charged a hefty fee for processing the VAT paperwork.

    It now transpires I have to re-register for VAT and then apply for the MOSS system or perhaps I don’t as according to another HMRC guideline I can apply for non-EU MOSS status as a non VAT registered business.

    However for non-EU Moss status I need a MOSS registration number which of course I don’t have as I have not registered for MOSS!

    Anyway I have withdrawn all my products from JVZ00 and await a way forward from my accountant. A good marketing friend Martin Avis has done the same and is going to move all his products over to Clickbank which is as many of the other commentators have stated the simplest solution going forwards.

    Of course on top of this, I still have the new company pension rules to contend with which mean I will have to setup a pension scheme for my son as he helps out with my business, this apparently is being phased in as we speak!

    Gotta love the EU for making business hard for its own people.

    igor
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  • James Hughes

    Reply Reply January 27, 2015

    Hey Richard,
    That is very alarming news and the fact of the matter is that all of us marketers need to join our heads in order to create more awareness on the matter. Thanks for the post, though, and all the following links that you have added in the comments.
    Regards.

  • Mike W

    Reply Reply June 23, 2016

    A costly experience for business owners either way. Business owners can pay for professional advice on VAT and VAT registration which can help to reduce the amount of VAT or not take advice and risk penalties – which are annoyingly easy to make for most people.
    Mike W recently posted…Haines Watts Leeds Football Forecaster – Winner 2015/16My Profile

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