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Post by Teri Berry on Dec 16, 2014 19:27:13 GMT
p.s. It's quite scary to think that I haven't had notification from the taxman about this - I only found out about it from Sara when her blog post dropped into my inbox. I too was shocked that they somehow thought this would only impact businesses that are already registered for VAT (in the UK that means you have sales in excess of £80k). From what I have read all the member states agreed there should be a minimum threshold below which your business should not need to register for VAT but as they could not agree what that threshold should be there isn't one!! How insane is that?!!! Even if they went with the lowest threshold used by any of the member states that has to be better than the current situation??? I can't believe our taxes are keeping these morons in employment
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Post by Teri Berry on Dec 16, 2014 19:31:04 GMT
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Post by MTRuth on Dec 16, 2014 21:49:21 GMT
Thanks for the link Teri - it was a good article. I hope they get all the kinks worked out but it sounds like a real mess.
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Post by lyn on Dec 16, 2014 22:29:22 GMT
Very interesting article Teri!
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Post by Teri Berry on Dec 16, 2014 22:40:35 GMT
Just thinking about this, does anyone know if this applies to online classes? Just found this that sort of answers your question: The same is true for training. If you deliver training via video where you are live on air at the same time as your customer, delivering the training that is still taxed in the same way as now. If you sell videos of you delivering training then that would be liable for VAT at the customer’s rate. Essentially if your class is live, you don't have to pay VAT but if it is recorded you do have to pay VAT. Here is the rest of the article if you are interested: rachelandrew.co.uk/archives/2014/11/25/how-small-companies-and-freelancers-can-deal-with-the-vatmoss-eu-vat-changes/
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Post by MTRuth on Dec 16, 2014 23:52:10 GMT
OK - it says selling a video as training. But if you are having an online forum with these training videos/pdf's where you interact with your students through the time they are using these downloads? So would that be considered live? I am sure you don't know all the details but I'm just trying to figure out what to do about starting online classes. This seems too much of a headache to deal with for sure.
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Post by MTRuth on Dec 16, 2014 23:52:40 GMT
Thanks for the second link by the way.
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Post by zed on Dec 17, 2014 12:18:27 GMT
Andrew Searle has some good advice in replies about offering a physical product to EU citizens and access to the 'free' download. Other people point out it is discrimination to refuse to offer services/downloads to Europeans (I'm guessing that applies to us in the UK, don't know about US/Canada laws) Here's more info from someone talking to HMRC www.enterprisenation.com/blog/posts/exclusive-hmrc-update-on-vat-mossApparently, these rules were brought in for our (UK) benefit A spokesperson for HMRC said of the new rules: "New EU rules were brought in to remove unfair competition between online traders registered in EU states with very low VAT rates and traders based in member states like the UK with higher standard VAT rates." It doesn't take into account that unless you voluntarily register for VAT, the threshold was £81,000 here, so didn't apply to small businesses.
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Post by lyn on Dec 17, 2014 16:15:52 GMT
Excuse me while I split my sides laughing Zed - nothing decided by the EU is for our benefit ... is it? I started a thread on the digital team's forum (Etsy) and this post was added: Hi all, this is a huge deal and will affect ALL digital sellers!
Please visit the EU VAT Action Team's website for the latest info: euvataction.org/
There are also tons of discussions on the Etsy Forums, and the special Facebook group: www.facebook.com/groups/DigitalVAT2015.
There's also a petition: chn.ge/169taUR
Etsy are refusing to make any announcements, but apparently they are talking to the UK Revenue guys (HMRC) today, along with other 3rd party craft platforms, so watch this space.p.s. I've signed the petition and emailed parliament. p.p.s. The main thing that anyone can do to help is to spread the word - it seems that micro businesses are only just finding out about this!
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Post by MTRuth on Dec 17, 2014 19:54:27 GMT
I'm sure that most small businesses selling downloads in the US know absolutely nothing about this. I have only heard about the issue through Facebook and here. If you don't follow the people that have been writing about it, you are clueless.
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Post by Shepherdess on Dec 18, 2014 0:55:05 GMT
So true Ruth. Zed I don't see how the discrimination thing works because all sorts of people will not ship to the EU or Canada for that mater. That would be discrimination according to what you said. Sounds as bad or worse than the UN trying to decide to do something
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Post by zed on Dec 18, 2014 10:50:30 GMT
I think that's probably just for us, the UK being part of the EU, Ann. I had a search around yesterday trying to find which items/services are exempt from the VAT, if we know that we can adjust how/what we sell. I couldn't find anything. I did find a list of VAT rates for different European countries. www.vatlive.com/vat-rates/european-vat-rates/eu-vat-rates/And they aren't lower, it seems to me this is a weird backlash because 'we' got upset about huge corporations like Amazon registering their businesses in places like Luxembourg and weren't paying their fair share of taxes. It wouldn't be hard to just roll out the small business tax level across Europe. I don't know how 28 EU countries think they are going to audit sole traders, small businesses and huge corporations across the world. Lyn, I signed the petition too. I was wondering yesterday if this could be a form of indirect discrimination since the majority of new start ups/small businesses are started by women and people with disabilities. I'm going to assume it doesn't apply to me based on that
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Post by Teri Berry on Dec 20, 2014 11:34:57 GMT
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Post by Shepherdess on Dec 20, 2014 15:10:49 GMT
well isn't that interesting
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Post by MTRuth on Dec 20, 2014 16:29:02 GMT
Thanks so much for that information Teri. It says that online courses with downloadable videos/PDF's that have support from a live tutor don't qualify for the tax. That is great. Now I can go forward with plans for online classes without worrying about it.
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