Juliet E. McKenna

As the holiday break draws to a close, Cheryl over at Wizard’s Tower Press spends yet more of her valuable time sorting out the complicated mess which these new EU VAT regulations have made of our pricing – as well as forcing all of our sales through third parties who all take their hefty cut. So readers will be paying more while all of us involved in making these books available earn less for them.

Meantime, I’m working with the EU VAT Action team to do all we can to create pressure for the changes we need, to get this legislation reviewed and revised from the ground up.

The more voices speaking up, the better the chances of meaningful action. So there are a couple of recent posts over at Digital Microbusiness Action Group on new targets for your letters.

New Year’s Eve seems like a good day to finally post these valedictory thoughts.

I don’t claim any level of personal acquaintance with PD James, but she was an Honorary Fellow of my old Oxford college, St Hilda’s, and also a regular at the annual Crime & Mystery Conference there, which I attend as often as I can. I think I’ve only missed three or maybe four of those since 1994. So I have had more opportunities than most fans to hear her speak and occasionally, to talk briefly with her.

She always took a personal interest in whoever she was speaking to, remarkable when you consider how many thousands of people she must have met in the briefest of encounters. One year at the St Hilda’s crime conference, I was substantially pregnant with my second child. The weather was hot and sultry and more than once, Baroness James of Holland Park appeared beside me, asking if I was alright, and did I want to sit down or perhaps she could get me some water? The next year? ‘Oh, my dear,’ she greeted me with a smile, ‘now, do tell me, was it a boy or a girl?’ I told her I’d had a second son and her congratulations were wholly sincere, no mere politeness.

I have pages of notes which I made while listening to her talk about aspects of the writing craft and the writing business, at St Hilda’s and elsewhere, notably during her tenure as President of The Society of Authors. She offered far too much good advice for me attempt to detail it here. I particularly remember her talking about the sense of place in her books, and how that was so often her personal starting point for a story. I especially remember her talking about the nature of malice and yes, evil, and how that isn’t something separate from everyday life and that’s what makes it all the more menacing. She was also, always, a passionate advocate for the literary value of genre fiction, upholding its merits when dealing with narrative, plot and character. And so much more besides.

Since I write SF and fantasy, I also remember a question from the floor at some event or other, when she was asked what she thought of the film adaptation of her novel, The Children of Men. She smiled and with a distinct twinkle in her eye, said she would much rather see a good film loosely based on a book than a bad film that was a completely faithful adaptation.

Or is ‘twinkle’ the right word? That seems a bit too cosy. ‘Glint’ seems rather too hard though and she definitely wasn’t hard. But as Val McDermid said ‘there was nothing cosy about Phyllis’. She’d lived far too demanding a life to indulge in sentimentality. Let’s not forget that Baroness James of Holland Park wasn’t born to rank, wealth or privilege. She was an honorary fellow of St Hilda’s but never went to university herself to study. Her father didn’t believe in such things for girls. She married young and then found herself supporting her family when her husband returned from the Second World War mentally ill. She would refer to such events in her talks, as and when some facet of her own life might be relevant to the topic at hand. Always matter of fact, never looking for sympathy, praise or such like. I think she would have found the idea of anything of the kind preposterous. But those experiences assuredly gave her a sound understanding of the unfortunate and the underdog which informed her professional and political life as well as her fiction.

Her literary interests went far beyond crime writing. She was an expert of the work of (another St Hilda’s alumna) Barbara Pym. As recently as last November, she gave a talk at the Bodleian Library to mark the Pym Centenary. I particularly remember her talk at The Oxford Literary Festival a few years ago, where she spoke without notes for 45 minutes, standing at the lectern, and then took questions for a further quarter of an hour, giving each one a considered and erudite answer. Since my mother is a tremendous fan of both Barbara Pym and PD James, she came up to Oxford for the day. Since I am on the college media network committee, and was thus involved in helping run the St Hilda’s day of programming, I was able to introduce Mum to her. Once again, even in that briefest of meetings they made a personal connection. (And seeing what that encounter meant to my mum meant everything to me.)

Then there was her interest in Jane Austen and ‘Death Comes to Pemberley’. I don’t mind saying, I approached the book with some reservations, having read a slew of truly dire Jane Austen continuations when I was a bookseller. Thankfully I liked it, and all the more so after hearing her talk about the process of devising the story and the thoughts that had prompted it, most particularly about the burdens of service and obligation on the likes of Mr Darcy and what that says about society, then and now.

That was at a St Hilda’s event for the English School, and the room was packed with students and alumnae and the occasional classicist like me . When PD James explained that she’d opted to write that book rather than a new crime novel because she so disliked the thought of leaving a Dalgliesh unfinished if she died half way through writing it, there was… not a murmur nor a whimper but a sudden and palpable stillness as everyone looked at her at once. The unspoken words on every tongue were ‘Oh no, don’t say that!’

She looked back at us all with the faintest of smiles, and observed dryly, ‘Anyone who has reached my advanced age without coming to terms with their own mortality must be a very strange and unhappy individual.’ As everyone looked at their shoes or their notes, just a little bit abashed, she continued briskly on with her shrewd analysis of (I think) George Wickham’s character.

So that’s something, I suppose. To know that she was at peace with her own mortality and with the consolations of her faith, at the end of a life so very well lived by any possible measure. It was still a shock to hear of her death though. She had always seemed so indestructible as well as indefatigable. It’s only in the past couple of years that she showed visible signs of aging, notably her deafness which she regarded as a confounded nuisance.

As the cliche goes, her work will live on. But there’s more to her legacy than that. I know I’m by no means the only writer over the years who’s seen her as a role model in countless ways. As we will continue to do.

Indeed, that’s largely the reason why I’m finally posting this more than a month after her death. I’ve been writing this piece in fits and starts ever since the end of November. That’s when the EU VAT catastrophe was just unfolding and was suddenly and unexpectedly taking up all my time. I did have more than a few moments’ indecision about what I should be doing and where my priorities should be. No word of a lie; thinking ‘What would PD James do?’ genuinely helped clarify my thoughts. She would have considered tackling such damaging and ill-thought-out legislation was the most pressing task at hand!

It’s way, way past time there was something on this blog that’s not about bloody VAT. Unfortunately that time is not today, as key members of the EU VAT Action Team are meeting with representatives of HM Treasury today – and the rest of us are poised, ready for action when we get their feedback.

Thankfully, this established fantasy reader has taken on the ‘women authors challenge’ and found his time very well spent indeed. Do go and have a read.

This looks really, really interesting! Wole Talabi tells us –

As someone who has been reading stories from foreign spec-fic mags since I was a young teenager, I’m very pleased to have my own story Crocodile Ark published in the first issue of this new African Spec-Fic Zine – Omenana – edited by Mazi Nwonwu and Chinelo Onwualu.

I know many Africans who have been trying to write spec-fic without any clear sense of the genre and its forms (I also tried to do it with my now defunct The Alchemists Corner column on TNC but I was undirected and the audience wasn’t quite right). Mazi and Chinelo have now taken a small but supremely significant step with creating Omenana; giving a place for all the scattered, isolated pockets of African writers that venture into spec-fic in their blogs, skirt it in their books, and occasionally publish it in other magazines, to converge on and call home.

Click through to his blog to read the full article

Initiatives like this are absolutely central to enriching the SF&Fantasy genre with new voices and new perspectives. How often have you heard someone who’s drifted away from SF&F saying, ‘well, yeah, it got to be just the same old stuff coming round again…’ Honestly, it’s not about ticking political correctness and salving our liberal ‘Western’ consciences (yes, I do know Europe is to the north of the continent). It’s about finding genuinely new, different, exciting and thought provoking things to read. And along the way, learning that the view of Africa we see through the mass media is woefully simplistic, even when it’s not downright wrong (and often insultingly so).

So let’s get behind this! Click here for the pdf of Issue One! Trust me, you want to see that cover art…!

And look! A post that’s not about European VAT!

Oh, hang on…

This digital age is wonderful for giving a voice to writers like this – especially as new technology is enabling Africa to leap forward straight into online reading and distribution, which is so vital given the lack of infrastructure on that continent for transporting hardcopy reading material, from magazines to vital textbooks.

Digital… er, hang on, does that mean African writers are going to get caught up in all this awful VAT mess, if they’re going to try to sell digital downloads into Europe. Y’know, where most of their customers will be, especially for the Francophone countries…?

Shutupshutupshutup! Not everything is about bloody VAT, Jules, even if it’s taken over your life!

No, hang on. This really is a thing. So far we’ve been talking about how it might affect UK and US sellers and those from other more developed countries across Europe. It’s time we started talking about the impact on initiatives like this. It really matters.

So if you have any way to flag up this to organisations who can help us make a noise about the far reaching and damaging implications of these new EU VAT rules on initiatives in the developing world, please, do so.

For those of you playing the VATMOSS game at home, we very much suspect that HMRC, Treasury and other relevant departments, here and in the EU, keep telling themselves that the number of businesses badly affected by all this is too small to be significant, and thus, there’s no need to alter their plans.

We need to convince them that absence of evidence is not evidence of absence.

Please complete this survey. It’s quick and easy to do and anonymous.

Please spread word of it as far and as fast as you can. The more hard data we can gather, the stronger our case will be.

There is also a new online petition to bring all this to the attention of Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs. Please sign it and spread the word!

Also, Friday 12th December, this story will be featured on BBC Radio 4’s ‘You and Yours’ programme. If you can listen in, great. If not, catch it later on iPlayer. Most important of all, tweet, email, contact the programme by whatever means you prefer, to let them know this really is a massive issue.

For those of you who’d much rather be reading about wizards, dragons, fantasy fiction, creative writing or any number of other things, my sincere apologies. Trust me, I’d much rather be writing about that sort of thing too. I will try to find time to be more interesting soon!

I’ve posted my thoughts on Digital Microbusiness Action Group, the little blog site I set up to see how many folk I could gather together, since all my pals with campaigning experience reckon working collectively carries more weight than individual voices.

The more voices in a group, the more weight it carries. If this concerns you directly as someone engaged in small scale e-commerce, please consider signing up. No fees, no obligations, no pack drill. It’s a place to find information for yourselves and to help supply (minimal) information to the government departments who’ve been making such far-reaching decisions on what’s demonstrably been inadequate knowledge.

That’s it for today.

I don’t know anyone in the book trade who doesn’t want to see Amazon pay a fair rate of tax. Gaming the existing system is one reason why they’ve been able to wreak havoc across the industry with predatory pricing and other tactics. Making them pay fair taxes would go some way to levelling the playing field. Unfortunately the way this is now being done will cause a lot of collateral damage. The further you go down the publishing scale, the worse the damage becomes.

This new system’s* been set up on the assumption that the majority of ebook sales are through third party vendors. That is perfectly true. Amazon in particular has a grip on that market which is now set to become a stranglehold. Because it’s nowhere near the whole story. It’s become very apparent that the authorities who set all this up have been missing a big piece of the picture. (Yes, I know I’m mixing metaphors.)

Firstly, yes, Amazon – and Google Play, and iBooks – all take a hefty cut of any revenue from the ebooks you sell through them, 30-70% depending on the deal you sign up for. Which is a non-negotiable deal, let’s not forget. You tick a box agreeing to Terms & Conditions which they can vary at any time, as they see fit. Unless you’re Behemoth Books, in which case you can negotiate your own terms, but no one without that kind of clout can hope for anything better.

Also, to use a couple of mythical examples, if you’re Behemoth Books, dealings through Amazon will be a big chunk of your business but you’ll have other revenue streams, notably but not limited to hard copy sales. But Back Bedroom Books of Chipping Norton, who’s an entirely digital publisher, maybe aspiring to offering print on demand editions one day in the future? Sales through these 3rd parties are a much bigger share of their total income, as the price for visibility and availability via Kindle or Nook or whatever.

At the moment at least, Back Bedroom Books can also offer .epub and .mobi files direct from their own website and keep all the revenue. They can do that for a short, exclusive period before the book goes to wider distribution, letting valued customers and a writer’s most loyal fans know where they can get the new book first, thus getting the maximum benefit from that first rush of sales. The customer pays the same price in the end after all, so readers don’t lose out. Those direct sales matter, and the smaller the operation, the more they matter.

But as of 1st Jan 2015, Back Bedroom Books and its equivalents will have to shut their online stores. For some operations, that’ll put enough of a dent in their revenues that they will no longer be viable businesses. So their anthologies showcasing and supporting new authors will be no more. The more established authors’ backlists which they might have published, and the quirky side projects, novelettes and novellas which the big publishers decline won’t be available. Which will be a blow to authors who are increasingly turning to such projects to bolster their dwindling income from advances and royalties.

Will that really matter to readers? Well, it will if your favourite writer can no longer afford to write. There are other issues as well. Amazon – and the others – aren’t necessarily always best placed to trade e-books across Europe. They have their own issues with territoriality and availability. Some stories I’ve heard about trying to buy UK published ebooks in Ireland are mind-boggling, if publishing and licensing contracts – and the DRM software that derives from them – consider Ireland to be part of Europe, which of course it is. Depending on which English language rights the publisher holds, it may simply not be available. Life can be particularly fun in Belfast, with a credit card from a UK bank that allows you to buy the book you want, if the inner workings of your e-reader have missed out on the last century of British Isles’ history and think that the entire island of Ireland is one country and so that counts as a cross-border sale into the EU where you’re not licensed to read it. So you can’t. Yes, I was astonished the first time I heard one of these tales of woe.

And let’s not forget that from time to time, whole swathes of ebook listings get deleted or delayed on Amazon – and the others – whether through accident, misunderstanding, over-reaction to some alleged moral panic, or when Amazon wants to force through some new terms and conditions. Behemoth Books has a whole range of other sales outlets, so that takes some of the sting out of the hit. They’re also big enough to generate sufficient bad publicity that whoever’s at fault gets the hint to sort things out pretty sharpish. Back Bedroom Books of Chipping Norton is in a world of trouble and the smaller the publishing operation, the less clout they have, however loudly they’re clamouring for action.

At the moment, if such an oddity crops up, that reader can head to the publisher’s own website and with any luck, they can get a DRM free edition that they can enjoy without these hassles.

Not after 31st December 2014, they won’t be able to.

*For those of you just joining this story – as of 1st January 2015, VAT (essentially a sales tax) on electronic products will be levied at the rate applicable at the customer’s location, rather than the suppliers’ base of operations. So Amazon will have to pay 20% for sales into the UK rather than Luxembourg’s 3%. You can find a whole lot more about this via previous posts and links on this blog. And let’s not forget it’s not just Amazon who’ve been taking (perfectly legal) advantage of the current loophole by funnelling all their business through Luxembourg.

So now calculating a price across EU borders means knowing the applicable rate of tax at the customer’s location. That’s 28 separate jurisdictions. Are you supposed to set a price that’s going to fluctuate at the check-out when someone tells you where they live? That’ll be so unpopular that people obviously won’t. So you have to pitch the price where you guess the plusses and minuses will even out and you won’t take too much of a hit. How are you supposed to know where people live? There’s a list of approved indicators, and you’re supposed to collect three pieces of data, of which two must match. Er, okay. Oh and you’ve got to store that highly sensitive personal data securely for ten years. Okay?

So this is a real headache, and the smaller the scale of your operations, the bigger headache it becomes because the turnover threshold for this is £0.00. Or €0.00. Or $0.00 in whatever sort of dollars you use.

Amazon – and Google Play, and iBooks – have known this is coming for several years now, and have their new systems in place, as anyone publishing via KDP now knows from this week’s email. Publishers who sell ebooks direct from their own websites – and who belong to the trade bodies which have been HMRC’s main route for spreading the word about this – have known it was coming and have paid their software developers to write them compliant new systems accordingly. Okay then, they’re covered.

For anyone else, there’s VATMOSS, the HMRC’s new VAT Mini One Stop Shop, which will do all the sums for you. That is fine if you’re already VAT registered, which means having a turnover of over £81,000 by the way. You’ll have an accountant who’s used to doing VAT returns and you can probably afford to pay him or her to do that bit of extra work.

But the smallest of small publishers? Who don’t dream of reaching VAT registration levels in their wildest imaginings? Who don’t belong to any trade body that could have warned them this horror was on its way? They’re in a world of trouble, because the free/cheap web payment mechanisms they rely on, like PayPal, simply don’t provide the location information they need. Even if they could get it, is anyone going to be happy with their highly sensitive personal data sitting on the hard drive of someone’s laptop on a kitchen table? They can’t opt out of EU sales either; plug-in web payment mechanisms don’t enable that and anyway that falls foul of discrimination legislation.

These small publishers are having to close their direct ebook webstores as of 31st December 2014. Unless they want to risk the chance of lose-your-house-money fines. Yes, really.

I’ve spent the weekend getting a few things about the new EU regulations on e-commerce clarified in my own mind, reading a range of online resources and also various bits of EU regulation and legislation.

Digital products as ebooks, training and self-help manuals or guides, craft patterns, digital art, photograph or music files are now defined as ‘services’ on an equal footing with cloud data storage, online marketplaces, web hosting and online games. Not the process of selling ebooks and music etc. The actual digital file itself is now a ‘service’ even though in most cases that sale will be a simple one-off transaction.

So there’s a fundamental and massive misunderstanding, or ignorance of, how small-scale direct e-commerce works. All the legislation refers to electronic service providers and specifically defines ebook sales as ‘like Amazon Kindle.’ Now, I would certainly agree that signing up for Kindle (or Nook or Google Play), qualifies as buying an electronic service. It means downloading their app software to your device, and buying books as well as paying for the ongoing benefits of cloud storage, the ability to re-download titles, to read those books on other equipment, so on and so forth.

This is wholly different to buying an ebook direct from a writer or a small press. That is a one-off transaction to purchase a digital file – nearly always DRM free these days – with no ongoing relationship expected or implied.

And obviously, the same is true for such small-scale purchases of knitting patterns, music, artwork, photos, how-to-guides, the list goes on and on…

I’ve also been talking to pals with successful campaigning experience and they all say working with an umbrella group is the most effective way to get press notice and to apply legislative pressure. So I though I would see about getting one underway.

I’m aiming to get together as many microbusinesses as I can – the part time, retired, carers, evening and weekend traders for whom small-scale e-commerce has offered a financial lifeline as well as the local businesses for whom selling e-products has offered a new income stream and promotional opportunities alongside their other activities.

Please check out the Digital Microbusiness Action Group if all this affects you. No fees, no obligations, no pack drill – I’m simply looking to get a viable number of folk together so we can speak with a single voice.

I can now refer to ‘we’ after getting ten sign-ups overnight – phew.

Oh, and why am I doing this? Well, I had a fair bit of time between now and Christmas allocated in my diary for preparing the next series of my backlist novels as ebooks. Since VATMOSS looks likely to shut the small e-press who’ve published my ebooks, I figure I may as well spend my time attempting to do something positive.

And now this blog will (hopefully) return to more normal content!

As people continue to seek clarification, it becomes more and more apparent that microbusinesses are going to be wrecked by this.

Cheryl Morgan of Wizard’s Tower Press (who have been publishing my backlist and new shorter fiction as ebooks.

In her follow-up post The VATMOSS Mess Enters Looking Glass Land she follows up with this revelation

Generally, non-resident businesses that must register for VAT in another EU state face a nil registration threshold. A major exception to this rule is e-commerce to consumers, where foreign EU retailers have special EU distance selling VAT thresholds.

I’ll repeat that. Special EU distance selling VAT thresholds, which apply solely to digital transactions. Here they are. And guess what? None of them are anywhere close to zero. All of them would easily allow a micro-business such as Wizard’s Tower to keep trading.

So we really need to press HMRC for solid reasons why they are making such destructive changes to UK VAT legislation when it doesn’t seem as if other EU countries are doing so.

Meantime, the impossibility of compliance is already seeing microbusinesses shutting up shop.

The Writers’ Greenhouse is shutting up shop. Crucial information here on how impossible complying with the associated regulations on storing customer data would be.

change servers and all my data storage: to comply with the data protection rules, everything would have to be on EU servers. My server, which hosts 8 websites and some 20 URLs, and I don’t even know how many associated emails, is based in Canada. Dropbox, which backs up all my stuff, is based in the United States. I don’t even know where my Gmail server is.

Clare Josa explains how using Paypal won’t enable online sellers to obtain the required customer information.

Incidentally, I’ve seen people scoffing at questions about where an ebook is taxed if a UK customer on holiday in France downloads it. Holidays are one thing but what about the extended periods that EU citizens now spend in other member countries? My husband works for the UK subsidiary of a Dutch firm which also has a Romanian subsidiary & it’s not unusual for Dutch employees to spend 6 months in UK, or English employees to spend 6 months in Romania. What’s the position there? How is the seller supposed to collect the two non-contradictory pieces of information to identify the buyer’s location when the credit card comes from a Dutch bank and the IP address and telephone number of the landline delivering the product is in the UK or Romania?

Savvy Mums Business Website article, raising the issue of people being pushed back onto welfare benefits. Bear in mind that 80% of the recently self-employed are women.

Rachel Andrew explains the horrible implications of the EU VAT “Place of Supply” change

You can only register for the MOSS if you are UK VAT Registered.

This means that Ann – our freelancer designer who also sells an ebook – is either going to have to register for VAT in every country she sells to, charge VAT to their residents and pay VAT due OR register in the UK and also register for MOSS.

And if Ann becomes VAT registered, all her prices go up by 20%. That’ll hardly help her business stay competitive, compared to similar traders who abandon digital products and can wait for the £80k threshold before they have to register.

The Government’s own service assessment of the VATMOSS portal “After completing our assessment we have concluded the VAT Mini One Stop Shop service should not be given approval to be a live service on the HMRC portal.” As of 3rd October 2014

HMRC’s own version of the Twitter Q&A.

Oh, they’ve also published an email address for queries. Since I have some very urgent ones over decisions I need to make soon about commissioning artwork and other ebook-related services, I wrote and explained my concerns. That email has bounced, telling me that’s an invalid recipient. Do we think that email address has gone down under a deluge of messages or it was never working in the first place due to some institutional incompetence?

Firstly, apologies to those finding all this stuff about VAT tedious and/or confusing. But it really does matter, and not just to authors trying to put out their own ebooks. Independent digital versions are increasingly the only way for readers to get hold of backlist titles and ebooks without DRM constraints.

Okay, here’s what little useful information I gleaned from yesterday’s HMRC Customer’s Twitter Clinic.

Let’s start with one definitive answer – which will interest the US authors of my acquaintance who sell direct or through co-operatives like Book View Cafe.

A Canadian knitwear designer asked
Question – As a Canadian selling online knit patterns, do I really have to track & pay #VATMOSS on the ~ 40 patterns/yr I sell in UK&EU?
Answer – Yes, if a digital service. Consider non-union MOSS scheme

So the next question obviously becomes – what is a digital service?

According to HMRC – “An e-service is one that is fully automated and involves no or minimal human intervention”.

So anything that’s an electronic product – ebook (fiction, non-fiction), music, training material, computer game, knitting or other craft pattern, the list goes on – that is delivered by any automated payment and download system falls under this legislation.

Okay, so what does ‘minimal human intervention’ mean?

At this point, HMRC’s answers started coming prefaced with ‘It depends’…

Q – Someone donates to my company in return for a digital “perk” (eg: through kickstarter or Patreon ) Do I need VATMOSS?
A – It depends on the nature of the perk.

Q – Are one-to-one web & graphic design services considered a e-service? Will this affect me as a freelancer?
A – Depends on whether the customisation is automated or involves human intervention. If latter, no.

Q – so web designers that design custom websites for clients are free from VATMOSS then?
A – Depends on whether the customisation is automated or involves human intervention. If latter, no.

Further clarification (I use the term loosely) from HMRC followed –“ “Minimal human intervention” is where a person takes some physical action for the service to take place.”

plus

“Emails & attachments are included if generated automatically by system following customer inputting their details and payment.”

But –

Q- If I sell a physical doc to EU buyer but then give them access to a free PDF version of it, do I incur VAT?
A – The new rules don’t apply.

And

Q – If a PDF copy of pattern/ebook is given complimentary with purchase of a physical copy of pattern/ebook is VAT owed on PDF?
A – No, it will not be subject to VAT.

Moreover, according to HMRC –
“Live webinars not e-service. If pdf and follow up recording are included in charge, will be treated same way as webinar…

If there is a separate charge it will depend upon whether the pdf or recording is an electronic service…

Virtual classroom combining live webinars, videos, pdfs would not be an e-service because of amount of human intervention involved.”

So we’re back to wondering what does or does not constitute the required level of human intervention.

Q- Does emailing with an attachment count as ‘human intervention’ when selling through a platform such as ETSY?
A- If they are physically submitting the email and it is not an automated process.

Q – But if the purchase is automated (ie via ETSY) and then I physically send the PDF in an attachment?
A- Payment service irrelevant to determine whether e-service.

Q – To be clear, regardless of how you’re paid, if you hand send out the download emails, it’s not an e-service?
A – That’s correct.

Similarly –

Q- Does that mean if I go back to the dark ages and manually send a download by file transfer it is exempt?
A -Manual downloads will be exempt.

Q – So even if I’m sending the exact same file to all customers as long as I do that manually myself I’m OK?
A – Yes, as long as email not automatically generated and you manually send it.

However –

Q- What about videos? If a customer purchases to get access to private videos (hosted on say YouTube or Vimeo)?
A – Sending the password manually by e mail does not constitute an electronic service so the new rules don’t apply…
However, if the service they are logging into is an e-service then it would be affected by the new rules.

Also –

Q – If sell a product & the user is redirected to a receipt page and they MANUALLY DOWNLOAD it, that’s human intervention, yes?
A – It is the provider’s manual intervention not the customer’s that is important.

So you can only avoid all this mess as a seller only by manually hand processing all orders and emailing files to customers.

Unlike for instance, Amazon who will continue to offer instant one-click payment and downloads. Right, so that’s going to make a customer’s choices pretty easy, eh?

Which brings me to the question of Amazon and other platforms like Etsy etc.

Q – How are devs selling apps on AppStore / GooglePlay into EU affected? Do the stores handle VATMOSS, or is it up to the dev?
A – Yes, App stores and marketplace will be responsible for VAT on dig services sold through their platforms.

Q- If u sell digi products via 3rd party platform but host selling buttons on ur own site do you have to register for VAT?
A- If providing a link to a third-party platform, no. If you sell through your own site, you would have to register.

Q – Can you provide approved list of 3rd party intermediaries that we can use instead of VAT reg?
A – Any sales platform is responsible if they initiate delivery or authorise payment process or set T&Cs.

Q – what if your third party platform disputes liability? Who is responsible in the meantime?
A – The third party platform is responsible

Q – what defines a third party platform and marketplace and what’s the difference between them?
A – A simple definition is that if a marketplace is responsible for authorising/allowing the download it is responsible.

Seems clear enough? Until people started getting into specifics

Q – Does this mean that the patterns I sell on @beCraftsy , @ravelry , and @EtsyUK are their responsibility for VAT?…
If I decide to sell via those platforms how can I be sure I am complying with law by leaving VAT to them?

Q – I believe you’re saying @beCraftsy @EtsyUK, etc are responsible, yet they say they’re NOT???

Q – I assumed that Paypal was more a payment processor than a marketplace.

Q – If ur PayPal account is linked to 3rd party, but the 3rd party provides order & delivery service, who pays VAT?

Q – What if one system initiates delivery (@fetchapp) and another authorises payment (@PayPal)? Which is responsible?

Q – But they authorize payments. I use Ravelry’s website to list patterns for sale, but PayPal handles the $.
Q- Are @gumroad included here? They said they are not but payment goes through them.

If there have been any clear answers to any of these questions, I have yet to see them.

And this is before we get into the considerable confusion of how traders with minimal turnover go about voluntarily registering for VAT in order to comply with VATMOSS. There are already reports of those who’ve tried being turned away as ineligible.

Another good question is how the advice to separate UK and EU trading into two separate companies despite both being part of the same overall trading business squares with other HMRC warnings that doing precisely this will be considered attempted tax evasion.

Reports are now coming in of small traders and companies simply abandoning e-commerce because of the complications and uncertainty, and also, the fact that getting it wrong will leave people liable to potentially unlimited fines.

At the moment, all my own e-publishing projects planned for 2015 are on hold. That’s the ebook editions of the Aldabreshin Compass series, The Ties That Bind novella and a related collection of short stories, and also a new urban fantasy novel. Because preparing those would require up-front investment of around £1500 from me for various art, map, editorial and other technical services.

Because I cannot get anything remotely resembling a clear answer on whether or not small presses are still/also liable for complying with these new EU VAT regulations as being part of a supply chain between the author and Amazon.

Until the small press I work with knows for certain what their liabilities will be, they cannot assess how/if to stay in business.

Clearly, if I was only publishing via Amazon, I’d be fine. But I do not wish to publish my ebooks with Amazon Kindle Direct Publishing as their terms and conditions are non-neogotiable and subject to change by them, at any time, without notice.

Publishing with a small press means I can negotiate a mutually satisfactory contract and also that small press can make my ebooks available via a range of outlets and in both .epub and .mobi formats rather than exclusively through Amazon.

So that’s where we’re at.

Is it too early for gin?