Digital Downloads & EU VAT Legislation

This is all heed nipping boring stuff and is just making people who run a micro business which sells digital downloads question weather it's worth all the hassle to continue selling digital downloads! I am now questioning if I should or should not add my downloads to my website when I get my new online shop up and running.

On 1st January 2015 a new EU legislation came into force which affects businesses that sell digital services, such as e-books, online courses, apps, or downloads to other EU countries. VAT is now charged in the country where the products are bought, as opposed to where the seller is located.

Now I thought this is ok it won't apply to me because my revenue is very very very much below £81,000 which is the UK threshold for VAT. Unfortunately for digital goods there is no threshold, I have to collect VAT from the first £1 and every EU country has its own VAT rates ranging from 8% to 27%.

Complicated? Yeah!

I'll try and simplify this

I have a digital download in my shop priced at £1 a customer living in Switzerland would have to pay £1.08 (Swiss VAT 8%) for this.
The same £1 item is purchased by a customer living in Hungary, who would have to pay £1.27 (Hungary VAT 27%).
I would have to register for the VAT MOSS online service so I could pay any VAT that I have collected quarterly. Now if the above examples were the only EU sales that I had in a quarter I'd be sending 8p + 27p a total of just 35p to HMRC who would then send 8p to Switzerland and 27p to Hungary.
I would also need a postal address and IP address for every customer which I must keep a record of for 10 years. This all sounds really ridiculous and a lot of work for such small amounts of money.

You even need to collect the VAT if you link to online content or a download sent by a manual email! But how will they know?
Yet it is ok for me to charge just £1 (as in above examples) with no VAT and send a manual email with the digital file attached :)

So EU customers feel free to contact me if you would like to purchase a printable download and I will PayPay invoice you for cost of item minus VAT and will email the file to you within 24hrs, this in fact is how it used to be done before Etsy let us store our download files on their servers.

If I was to go ahead and add downloads to my online shop on my website then I would also need to look into software that would work out all the different VAT rates for my EU customers.

I realise that this legislation was put in place to catch the big fish like Amazon, Apple etc. but it's all the little fish that are being caught and drowned! I don't think it was really thought through.

Even with my little shop being on Etsy this still affects me, yet Etsy have implemented a system that works out and adds the VAT to my downloads for EU customers. As Etsy is based in the USA though my UK customers get charged VAT too, which they shouldn't as the £81,000 threshold does apply in my own country!

Still confusing!

Then theres this other thing thats annoying me...... If my EU customer pays with PayPal then PayPal charge me fees on total amount that gets paid into my account...ie. cost of item plus the VAT. Then when Etsy sends me my monthly bill which will include any VAT that I have in my PayPal account, they charge me the full VAT thus I'm out of pocket here!!!

This legislation affects so many micro businesses around the world and because of this some would rather not sell to EU customers.

So I'd like to say Thank You to the barmy Eurocrats for once again overly complicating something and putting yet another hurdle in the way of ordinay people trying to eek out a living and build a little business.

***Disclaimer: I do not claim to know everything or understand everything about EU VAT Legislation, this is just my very simple take on it. 

A few links below, but do a search there are many people and reports about this subject online.
VAT on Digital Services in EU
facebook page Digital VAT 2015  with helpful discussions
The Guardian
The Telegraph

So after all that heed nippy stuff lets finish with a little something that made me smile :)
Last week I went to the Falls of Feugh near Banchory and there is so much love happening there :)
Can you feel the love?

Love locks on the bridge

I wonder if Trish and Brian are locals

Laura's Logo

Laura from Laura Spence Photography asked me a few weeks ago to create a new logo for her business. I've known Laura for a good few years now, in fact she is family and I have always admired her work. She is an award winning baby photographer and she also photographs families and weddings, pop over to her website and see some of her work.  Laura wanted a round style logo and it had to have a baby within the design.

It was time to get my creative thinking cap on and after many stages of development I created the final logo design. Laura loves her new logo and is so happy with it, she couldn't wait to show it off and add it to her website. I love when my clients are happy :)

A little more about the process of developing the logo can be found in my portfolio on Behance.

My Puffin Heart Art is now printed on greeting cards and is available to purchase from my new shop and the Redwood Gallery in Echt, Aberdeenshire.

I've just mentioned my new shop but I will tell you more about this, my new website and Facebook page in another post soon. Over the next couple of days I will be working on a new design for my website, shop and Facebook page and get them all updated. I also need to make a section on this blog for Graphic Design.

Busy busy busy...

so busy I haven't had time to blog for a few weeks, but I'm back now with lots to tell :)

I took a week off and drove south to Fife to visit my family and friends. I had a great time and didn't manage to fit everything in that I wanted to do but that's good 'cause it means I'll have to go back again soon. Catching up and spending time with all my grandkids (I've got 7) was the best bit and they keep me young.

Since coming home I've been doing a mixture of  more decorating when it's been raining (we've had a lot of rain) and gardening when it's been sunny.

My Highland Coo Heart Art greeting cards have been selling well in the Gallery, so I got to work creating some more heart art. This time I did puffins, I love these strange wee birds, they have such a sad looking expression and a comical wee walk. I'm very happy with how this turned out and will be getting greeting cards and A3 prints printed soon.

I've also had some Graphic Design work for a client that I had to keep quiet about until the event had been launched. So now I can shout about it..... I created the logo for the Mary Queen of Scots Festival which is taking place in Kinross, Scotland in September. You can find their Facebook Page here. Below are examples of how the logo could look on promotional items.

I've also just started working on another logo design for a client, that I'll show off when it's completed.

As I'm doing more design work at the moment I was thinking it was about time I got around to updating my website, but me being me have decided to give it a whole new look, so that will keep me busy once I decide what I'm going to do. My portfolio can be viewed on my website or more images for each project can be viewed in my Behance Portfolio.

One decision I have made though is to keep Ainjewelz online shop just for Craft and Party Downloads and open another online shop for my Digital and Mixed Media Art, where I will sell prints and greeting cards. Once this shop is open I'll announce it here :) I have made a start though and have a new Facebook page for my Graphic Design Services and Digital & Mixed Media Art, this can be found here. Please pop over and give me a 'Like' and  a share. Eventually my website, Facebook page and online shop will all have the same look, once I decide on a design I'm happy with......I'm so hard to please! I'm my own worst client lol

I'm also working towards having enough work to display and hopefully sell at a local Art and Craft Fair so it's a good job I love to be busy!

..... and finally the sun came out and we had a day out, of course Gregor McGregor tagged along

Taking in the sea air in Banff

I was so busy taking photos I never noticed Gregor down a can of lager lol

the sea at Gardenstone looked like the Mediterranean, but it was unbelievably windy.

Had a great day out and hope to go back to the north east coast with my camera again soon when I have time to take a day off.

Where have you been on your sunny days off?