The Holidays Can Start, My EU VAT Headache is Gone!

You may have heard me banging on in recent weeks about the EU VAT troubles (in a nutshell: VAT due in customer’s country, not seller’s; utter nightmare for small businesses and customers of small businesses). Especially if you follow me on Twitter, you have been bombarded with tweets and retweets about how unfair, ridiculous and impossible this legislation is. My apologies! I will try to limit my tweets about the subject from now on! 😀

One of my biggest problems with it is that I found out about it via facebook at the end of November…just as I was racing to meet an impossible deadline to get my (ironically digital) workshop completed before Christmas. So I had no time to spare for it and no intention of taking my brand new product off the shelves again by 1st January.

Thanks to EU VAT Action I was kept well informed of what was going on (mainly pounding it into the heads of politicians that this legislation is impossible for small businesses to comply with and will drive many out of business), and thanks to the facebook group and the twitter hashtag #EUVAT I’ve been compiling a list of potential solutions to look at when I had time. (Thanks EU for wrecking my plans for time off in the holidays)

Over the past 4 weeks, several solutions have argued for preference in my head:
1. Don’t sell to the EU at all. Still one of my favourites to be honest, but as a customer, I am upset that a lot of my favourite businesses across the world are taking this approach…so I can’t in good conscience do it as a business.
2. Don’t sell digital products. I have 3 digital products currently available, and ideas for some dozen more…I do not want to stop selling them. Also, I am hugely offended by the idea that some shortsighted EU bumble-butt will stop my plans for world digitial-domination.
3. Move to France. Apparently the French government have told their small business citizens to ignore the legislation below a certain threshold. (Ah, some common sense! Anyone in UK Government with any of that?) The idea of moving to France is tempting, but impractical.
4. Turn digital products into physical ones. I liked this idea for a while, but it does have it’s downsides – higher prices for customers, more admin and messing about for me.
5. Register for VAT MOSS, saddle myself with extra admin and hassle to pay miniscule amounts of tax in EU countries. Never a serious contender.
6. Use a 3rd party to sell through who take responsibility for all the tax-mess. Of course, this does have the downside of losing a percentage of revenue, but given the other options, it seemed like the best course of action.

So over the last couple of days, I’ve been investigating options and have chosen a winner!

Paddle.com. I was super impressed that they’d addressed the VAT issue so clearly and simply; they got back to me within 20 minutes of my query about whether they were set up for courses (and they are – ebooks, apps, courses, music, video, software…the lot). You can use your own links, so if you’ve been used to selling through your own website, you basically still can.

Set up is crazy-easy – I had 2 products set up within an hour (and you could do it in less time if you didn’t faff as much as I did!). And their fees are reasonable – 5% (or 15% if you opt to have them promote your stuff too…and why not, it’s sales you wouldn’t have had otherwise). You can choose whether your price is VAT inclusive or exclusive. You can run promotions and the dates are automated (I was so happy with this as my course’s price goes up 1st Jan…and I thought I’d have to log in to sort it. Not any more!)

They’re also set up for subscriptions, coupons…everything a girl could want in a 3rd party reseller. Yes, you ‘lose’ some money by using them, but for me this is more than offset by the loss also of the hassle of international tax compliance. The only ‘downside’ I’ve found so far is that there is a minimum payment threshold of $50, so if you’re selling low-priced downloads to small amounts of people, it might not be the right platform for you.

But other than that, I love them – and not just because they’ve taken away my VAT headache and given me back time off over the holidays! They’ve been helpful, responsive and so easy to use I’ve been flabbergasted. Thank you paddle.com.

Also in the running were Payhip (who are not really set up for courses – their download links expire so you’d have to do a pdf with the info they needed to get the course material…an option, but a bit of a faff) and Fedora (who are totally set up for courses, but sadly didn’t get back to me about their stance on EU VAT).

Please note: I’m not a lawyer, an accountant, a tax specialist or the oracle…I’m just a small biz owner – so please do your own due diligence before copying me…nothing in this post is intended as Tax Advice or Business Advice or anything other than a chance to virtually hug paddle.com and share my EU VAT story (which has a happy ending!)

If you’re interested in finding out more about EU VAT, the implications, the complications and the ongoing campaign to make it less restrictive, absurd and economically damaging, check out EU VAT Action; and if you’re a small business worrying about the implications of EU VAT, go join the facebook group – they have loads of advice and solution ideas there for you.

Now I’ve found my solution and got rid of my headache as a business, I’m more concerned as a customer…because many small business across the globe are either closing their digital doors completely, or just excluding EU customers (and who can blame them?!) which is a crying shame and bad for everyone concerned. Let’s hope the politicians have a rethink…but you need to add your voice to show them that it’s affecting everyone.

Here’s hoping you find the perfect solution for your business!

Love

Donna.x