Gath­er­ing MOSS

David Lang­ford has bad news for fel­low writ­ers

SFX: The Sci-Fi and Fantasy Magazine - - Opinion -

Re­mem­ber my SFX 239 col­umn on the joys of cre­at­ing your own ebooks? Flog­ging th­ese was a sooth­ing mi­crobusi­ness, with­out the has­sle of wrap­ping and post­ing POD books. Money ar­rived via PayPal ( for ex­am­ple) and books went out as email at­tach­ments or web­site down­loads. Sales mightn’t be huge, but there was the quiet sat­is­fac­tion of get­ting 100% of the profit – rather than the mis­er­able 25% that so many large pub­lish­ers have de­cided is a gen­er­ous max­i­mum.

This sim­ple way of life ended on 1 Jan­uary. The prob­lem was Ama­zon – not di­rectly, but be­cause EU gov­ern­ments hated Ama­zon’s ploy of sell­ing from places like Lux­em­bourg where VAT is low, giv­ing them an edge over reg­is­tered UK sell­ers who must charge VAT at 20%. UK mi­crobusi­nesses weren’t both­ered be­cause you didn’t need to reg­is­ter for VAT un­til your an­nual turnover went past £ 81,000.

Un­der the new rules, Ama­zon must now charge VAT at the ap­pli­ca­ble rate in the cus­tomer’s coun­try. As noted, that’s 20% here. It’s a huge has­sle to keep track of VAT rates in dozens of EU ju­ris­dic­tions, but Ama­zon’s ac­coun­tants have to deal with it. Un­for­tu­nately, so now do tens or hun­dreds of thou­sands of one- per­son mi­crobusi­nesses sell­ing dig­i­tal prod­ucts like SF/ fan­tasy ebooks, Clanger knit­ting pat­terns, Klin­gon recipes, and so on. The hor­ri­ble sur­prise was that although the stan­dard UK VAT thresh­old stays at £ 81,000, the spe­cial new thresh­old for EU sales of such dig­i­tal “ser­vices” is… zero.

Right. By sell­ing a sin­gle 99p ebook on­line to a non- UK EU buyer, you’re au­to­mat­i­cally plunged into the night­mare of VAT. You need to sign up at the UK MOSS site ( Mini One Stop Shop; how cud­dly it sounds), ap­ply VAT at the proper rate for each cus­tomer’s coun­try, and start sub­mit­ting VAT re­turns four times a year. It gets worse. You need two con­fir­ma­tions of where each cus­tomer lives – the “ver­i­fied ad­dress” pro­vided by PayPal ( that ex­am­ple again) may not be enough. You must keep th­ese cus­tomer lo­ca­tion records for ten years, with tire­some bu­reau­cratic safe­guards that dump you into Data Pro­tec­tion Act hell.

It’s hardly sur­pris­ing that af­ter re­search­ing the thrills and pit­falls of e- trad­ing un­der the new “VATMOSS” regime, many SF/ fan­tasy ebook pub­lish­ers have de­cided that the best way to deal with the whole ghastly VATMESS is to go out of busi­ness. Ac­coun­tants and lawyers agree this is prob­a­bly the safest plan.

Al­ter­na­tives? You can revert to the Dark Ages and make the post of­fice happy by mail­ing ebooks on CD or floppy disk – be­cause in this Alice- in- SF writer David Lang­ford has had a col­umn in SFX since is­sue one. David has re­ceived 29 Hugo Awards through­out his ca­reer. His cel­e­brated SF newsletter can be found at http:// news. an­si­ble. co. uk. He is a prin­ci­pal edi­tor of the SF En­cy­clo­pe­dia at http:// www. sf- en­cy­clo­pe­dia. com. Won­der­land reg­u­la­tory world, the iden­ti­cal ebook at­tracts VAT if it’s a web­site down­load, but not ( un­less you’re VATreg­is­tered for other rea­sons) if it’s sent by snail­mail. You can carry on as be­fore and hope no one no­tices – but re­mem­ber the VAT au­thor­i­ties ( HM Cus­toms and Rev­enue) can in­flict truly ter­ri­fy­ing fines. How about re­fus­ing to sell ebooks to non- UK EU cus­tomers? HMRC doesn’t ob­ject but warns that ex­pen­sive EU an­tidis­crim­i­na­tion law­suits could fol­low. Lastly, you can sign up with a big dis­trib­u­tor that takes a huge share of your rev­enue, such as Ama­zon, and savour the irony of an anti- Ama­zon reg­u­la­tion that swells the prof­its of Ama­zon.

Frus­trated by HMRC ad­vice rang­ing from un­help­ful to con­tra­dic­tory, SF au­thors and pub­lish­ers took the lead in push­ing back. A Change. org pe­ti­tion to Vince Ca­ble MP, Sec­re­tary of State for Busi­ness In­no­va­tion and Skills, quickly reached 10,000 signatures and brought the use­less re­sponse “Don’t worry, most peo­ple won’t be af­fected.” Per­haps he meant “most MPs”.

Check for break­ing news at dig­i­talmi­cro busi­nes­s­ac­tion­group. word­press. com.

Many SF ebook pub­lish­ers have de­cided to go out of busi­ness

David Lang­ford, if trans­mit­ted dig­i­tally to Hun­gary, is sub­ject to VAT at 27%.

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