VAT Changes in January 2015 for digital product suppliers
Helen Lindop, is the the Social Media Trainer and Strategist for the WOBS Business Training Academy has spent most of last week and this week researching this and this is what she has to say:
“For me, a good chunk of the last week has been taken up by trying to understand the EU VAT changes which will apply to me as a digital product creator from 1st January.
I’ve not blogged about this until now because I didn’t feel qualified to do it. I’m very cautious about giving any legal or financial advice because I’m not a lawyer or an accountant.
But I’ve gathered a list of good articles about this problem and I wanted to share it. So here goes.
First, here are some of the best articles I’ve found explaining the significant problem faced by any of us micro business owners who sell ebooks, membership sites, software or any other digital product or service that could potentially be bought by anyone in the EU:
New EU VAT rules threaten to kill UK micro firms from The Telegraph
New EU VAT regulations could threaten micro-businesses from The Guardian
The horrible implications of the EU VAT “Place of Supply” change from Rachel Andrew
EU VAT Changes – What you can do by accountant to solo business owners, Rosie Slosek. HMRC claim that the vast majority of micro businesses will not be affected because we use third-party marketplaces such as app stores, which isn’t true in my experience. Rosie’s article explains why using a marketplace isn’t straightforward as it first appears.
Advice and information from HMRC:
Guidance from HMRC about supplying digital services – if, like me, you’re planning on using a marketplace to sell your products from now on, pay close attention to HMRC’s definition of a marketplace in section 1.2
How you can keep up to date
Follow the #VATMOSS and #VATMESS hashtags on Twitter
This Facebook group has some very knowledgeable members – Digital VAT 15
Follow the campaign to Uphold the VAT Exemption Threshold for businesses supplying digital products and sign the petition.
Where to get help
Talk to your accountant, if you have one.
Phone the HMRC if you don’t have an accountant, but I’ve heard that some micro businesses are sometimes being given contradictory information from the HMRC so be cautious. Write down who you spoke to and the date/time if you can.
There’s a lot of misinformation out there in Facebook groups and other forums, so be careful where and who you get your information from. This change is horribly complex with lots of grey areas that still need to be cleared up, and if we fail to comply then we could risk a big fine.
If you’re based outside the EU this still applies
The best info I’ve found if your business is based outside the EU is here.
I will update this post as I find other good sources of information.
Despite the campaigns going on at the moment, this EU VAT change won’t go away (at best it may be made a little easier for us). So please do get informed from reliable sources so you’re ready for the change on January 1st”
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