What’s this? I hear you cry… Penny writing about VAT? EU VAT regulations? I don’t come to Planet Penny for that!
Well, please bear with me because this is something which has had a big impact on me as a business, and for thousands of small and micro businesses, many of them deciding to stop trading as a result of this new regulation. And also on you as a customer.
I’m not going to try and explain the details of this, there are others who have done it much more clearly than I can. The basic problem is that anyone selling digital goods on line to someone purchasing from an EU country is liable to pay VAT on the sale to the country in question (VAT rates differ across Europe) The threshold is zero, so if you only sell ONE item, you are liable.
The VAT threshold in the UK is £81,000, so I was never going to exceed that with my little business, but this has thrown a massive cat among the pigeons. HM Revenue and Customs completely underestimated the number of us out there who run our own small creative businesses, who are affected by this and who didn’t know anything about it until it hit social media in the run to Christmas, spoiling Christmas for many people.
HMRC’s stance is that if you sell through an online marketplace such as Amazon or Etsy, then they should take responsibility for the tax, but Etsy has stated that they will not be doing this.
There’s an awful lot going on behind the scenes at the moment, lots of alternatives to Etsy, petitions to sign (and I hope you will) but for the time being I am staying with Etsy. Because, and I hope I’ve got this right, if there is human interaction during the transaction then the regulation doesn’t apply, after purchase I will email the patterns within 24 hours. This seems like a huge step backwards, and it inconveniences everyone, including people who live in places where none of this is of any relevance, but for now it’s the only option and I needed to explain.
The following link explains everything about the EU VAT changes with a little animation. Please watch, and if you would like to support me and all my fellow small creative businesses, please sign the petition!