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New EU VAT regulations - selling digital content & services
show user profile  ScotlandDave
Just in case it applies to anyone here that hasn`t heard of this, as of the 1st of January 2015 if you sell or provide anything digital ( ie plugins, tutorials, anything downloadable, or provide services ) to anyone in the EU you have to be VAT registered and are responsible for paying VAT on each and every transaction. So whether you are in Europe or America or anywhere else, if you sell something digital to someone in Europe you have to be VAT registered in Europe.

My understanding of it is roughly as follows: In the UK up until now there was a VAT threshold and you did not have to be VAT registered until you were above that threshold ( sales above 50k or somewhere in that region ). But with the new regulations, if you sell anything to anyone or provide a service in Europe, you have to register for VAT and pay the 20% on every such transaction - there`s no threshold.

I imagine this is going to hurt everyone from small independent plugin devs and guys selling tutorials or even doing freelance work to larger companies who now have a ton of additional overheads and so prices for trivial stuff will undoubtedly rise substantially.

Here`s where i heard about it with a fairly well-informed rundown on the basics of it. On the last page there`s also a post explaining roughly the steps required to get up to date with HMRC in the UK:

http://forums.cgsociety.org/showthread.php?f=47&t=1241090




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read 714 times
12/27/2014 2:49:21 PM (last edit: 12/27/2014 2:49:21 PM)
show user profile  LionDebt
It's total bullshit and it's going to sting.
read 705 times
12/27/2014 4:08:06 PM (last edit: 12/27/2014 4:08:06 PM)
show user profile  FX
Not sure if this will impact freelancers so much, I read this a few weeks ago, still seems to be a grey area who this shit affects....

"Things that don’t fall under this are services that you provide in person. As an example if you have a service where you design an ebook cover for a customer, that would not fall under the these rules as you are providing a unique, hands-on service to the customer. If you sold template ebook covers that customers could buy, download and edit themselves that would fall under the ruling."

http://rachelandrew.co.uk/archives/2014/11/25/how-small-companies-and-freelancers-can-deal-with-the-vatmoss-eu-vat-changes/

If that's not the case and I "MUST comply with the new regulations."...fuck you, come get me.

read 696 times
12/27/2014 4:34:16 PM (last edit: 12/27/2014 4:34:57 PM)
show user profile  mike_renouf
Another example of the government getting behind entrepreneurs and small businesses (and ****ing them in the ***).




read 678 times
12/27/2014 5:19:12 PM (last edit: 12/27/2014 5:19:26 PM)
show user profile  mike_renouf
Right... So the .gov website says "Merely communicating by email and sending attachments does not constitute Digital Services".

So as long as you're in individual contact with a client when supplying your product or service you're ok. Automate your service and you're boned.

Awesome way to promote productivity guys!




read 675 times
12/27/2014 5:24:53 PM (last edit: 12/27/2014 5:24:53 PM)
show user profile  Mr_Stabby
balls, doesn't affect me anymore but a lot of people i know are going to be pissed

read 667 times
12/27/2014 5:49:29 PM (last edit: 12/27/2014 5:49:29 PM)
show user profile  FX
"Another example of the government getting behind entrepreneurs and small businesses (and ****ing them in the ***). "

^^^ this, and as long as they are bringing in money they couldn't give a shit who it affects.

Fat cat sits in office rubbing his hands logging the profits, while lives are being ruined..soulless bastards.
read 666 times
12/27/2014 5:55:46 PM (last edit: 12/27/2014 5:55:46 PM)
show user profile  ScotlandDave
Euro cutpurse legislation :/

Some good points raised re the grey area of what is recognised as a VAT chargeable service and what isn`t.. Definitely have to look into this a bit deeper.

Just when i was gearing up to release my first couple of Cinema4D plugins. Added complications and more cost :/


Something i wonder is - how do governments expect to have the resources to police this?

I`d be surprised if most inland revenue services have the resources to deal with it. The current tax system in the UK basically relies on businesses being honest in their tax returns with the overlying `threat` of random audits. The sudden massive influx of quarterly VAT returns that are going to start flooding in across europe will be a huge burden..



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read 643 times
12/27/2014 8:13:12 PM (last edit: 12/27/2014 8:16:21 PM)
show user profile  reeves1984
Charging VAT is not as simple as you guys are making it out to be, for example if you are VAT registered you also claim the VAT back when you have to pay it too (perhaps not quite as simple as that either)

--
Simon Reeves


www.simonreeves.com - VFX Artist & Blog
twitter


www.analogstudio.co.uk <-- I work here

read 641 times
12/27/2014 8:15:05 PM (last edit: 12/27/2014 8:15:05 PM)
show user profile  ScotlandDave
Reeves I think the negative impact of this is largely related to smaller businesses and sole traders who were previously `under the net` of VAT regulation and who wouldn`t in the most part be actually paying much VAT for goods and services in the any case, but will now have to charge for it to customers nevertheless..



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read 637 times
12/27/2014 8:20:40 PM (last edit: 12/27/2014 8:20:40 PM)
show user profile  Garp
Well, this sucks!
I'm considering more and more moving somewhere else. Vancouver, perhaps...




read 607 times
12/28/2014 7:18:37 AM (last edit: 12/28/2014 7:18:37 AM)
show user profile  reeves1984
I'm not saying the change is good, I'm just pointing out that charging VAT is not the only thing that is relevant when you are VAT registered.

If somone thinks it means that they now have to charge ~20% extra on everything they sell, and thats all there is too it, they should look into what else happens when you're VAT registered

--
Simon Reeves


www.simonreeves.com - VFX Artist & Blog
twitter


www.analogstudio.co.uk <-- I work here

read 595 times
12/28/2014 12:43:57 PM (last edit: 12/28/2014 12:43:57 PM)
show user profile  BishBashRoss
Sucks for the musicians, wont really affect me luckily.





read 590 times
12/28/2014 2:01:06 PM (last edit: 12/28/2014 2:01:06 PM)
show user profile  Coxy
There are benefits for being VAT registered. Before it was £81k threshold. Buy your computer equipment (or anything with VAT) from your registered company and you can get it all back at the end of the year and on top of that you also get taxed only on profit, so you wouldn't be getting corporation tax on the equipment at all. The trick is to make all of this work in your favour.

I mean, don't think about it as it coming out of your cut. I mean VAT is VAT, I mean most people just add the VAT onto the price of the item being sold.

So if you sell something for £20 it becomes £20 + VAT. Sure, it might turn a few people away, but pretty much everything people buy is taxed through VAT anyway, so if you are offering a product it really doesn't effect you that much in terms of attractiveness.

It would be simple enough to get around. Open two companies, one to sell your products and one to work from as a freelancer. Deal with everything VAT based from the registered company and then do your personal contact work from the other one.

The difficult is when you do your personal work from a LTD company that is VAT registered and you are charging say £5k for a job that turns into £5k + £1k VAT to individuals who are not registered. That is really the only time you will become unattractive. Also if you company you work for is VAT registered, then the issue is moot and they claim it back also at the end of the year.

So yeah, opening a Ltd Company is easy enough. I have two companies! and if this is the case ill just VAT register one.



www.artasmedia.com
read 567 times
12/28/2014 6:28:32 PM (last edit: 12/28/2014 6:33:08 PM)
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