Tuesday, 16 December 2014

VatWhat?

A lot of artists, designers, musicians and enterprising kitchen table creatives are just waking up to the breathtaking legislation set to sweep through the internet on January 1st. Our finance ministers, HMRC and as Mr Andrus Ansip so testily put it, have had full knowledge since devising the 'single digital market' strategy for the EU for six years. Yet for thousands this news is only just seeping out.

In case you're not yet aware, the EU is making on line retailers of anything digital (music, e-books, knitting patterns, craft templates, beadwork patterns, downloadable pdf's) responsible for collecting VAT from the customer, at the rate of VAT in the customer's country if they live in the EU. It's a complicated mess, succinctly described by Clare Josa,  here.
It is currently not viable for genuinely small businesses to comply. HMRC's big hope is that we will all register for VAT under an umbrella scheme called VATmoss, but only for anything digital, saving us the hassle of having to register in 27 different countries with, collectively, 75 different rates of VAT. They hope to apply this law to all products sold on line as soon as they can.

Just in case you thought this was too easy, the scheme applies to anyone, anywhere, selling into the EU. HMRC have also threatened anyone not complying with state of the art technology in the form of a new tech savvy team (22 jobs currently advertised) and 'web bots' to track the errant down.

It appears, however, that they think that what applied to the internet in 2008 is still current today, and assume that anyone with something to sell on line is selling it through Amazon type third party platforms. Unfortunately, to date most of these were late to the party too, and have taken a swift step back, landed the problem right back with us.

What caused this scheme to be thought up back in the day? .. a means to stop said corporate giants settling in tax havens like Luxembourg. Another stock comment is that it is designed to 'create a level playing field'.

You can read more about it, sign the petition, storm up twitter and support a growing international band of tiny people taking on a leviathan.

Here's why I think you should.
The internet has grown exponentially and is the most magnificent form of education, exchange of expertise and communication this planet has ever experienced.
In my small world of beading there has been an explosion of creativity, new techniques, new beads, new designers. Artists are no longer distant beings who's work we admire in books, they are blogging and sharing, facebooking and friending. At the click of a button I can browse museum collections, research history, find the inspiration for my next design or class.
I may be a micro business but I help fuel an international trade of big manufacturers products, I sell a pattern to you, next you go buy what you need, they sell and go make more beads, thread. tools, bead mats, craft lamps reading glasses. I'm only one tiny part, and that's the point, micro businesses may not make a lot of moola individually, but together we create an industry, we really do.

In my little bead studio in the heart of the English countryside, I can connect to everyone who loves beads as much as I do. I love this craft so much, relish each new innovation, congratulate excellence and put my share of discoveries out there too. I can ask for advice, talk to my students, and share news about my patterns and kits.

All I needed was a simple website and a paypal account. I am grateful for every purchase from my website, each one validates my creativity, I'm happy to talk with my customers many of whom are now firm friends. Having an online presence has given me amazing opportunities, to travel and teach, to meet my peers and mentors. this is how crafts stay alive, renew and grow.

For every form of creativity you can imagine, from model airplane builders to geeks coding awesome games and apps, making interactivity so readily available to anyone with a phone. Trending crochet? bloggers made it cool to love a Granny Square.
It all starts with just one person having a brilliant idea and the guts to put it out there. We mostly make a modest living, not everything in life is about money and that's how we work.

 This terrifies legislators. In my beading world I have friends in every country, politics is not an issue, we just love beads and each other. But this is why they will chip away, taking a freedom here, levying a tax there, because they can't see a community, only a community chest to be plundered. Far from levelling the playing field, what they are about to achieve is the most  invasive restriction of intellectual and creative freedom ever, EVER.

If you still and think, 'this doesn't apply to me', yes it does, it really does, whether you are a kitchen table entrepreneur, an educator with useful knowledge to share or a customer out browsing for a treat.  Your online world is about to gat a whole lot smaller and meaner. Already there is much talk of boycotting the EU. So easy to think 'OK I'll just take my beading pocket money to artists and designers outside the EU'. It's already happening.

I can't compete with that, but it isn't a level playing field any more is it?

I hope the legislators can be made to see common sense, if this was just about tax, I think they could be persuaded, all it needs is a simple agreement to exempt businesses beneath a certain size. Common sense because the costs of trying to recoup half a euro here, a couple of francs there between 28 countries will be way more than they will earn from the micro businesses. Targeting us might feel big and it might feel clever, but we are the shoulders on which those bigger businesses stand.

So on January 1st, I'll still have a website, you can still buy my kits and patterns, you just won't be able to download them, I'll have to post them to you... for now...
because in a back bedroom somewhere, someone is working out the next generation of technology which will make it possible for us to keep our amazing creativity flowing around the world, and yes, pay the tax too, but in a simple, click here and it's sorted kind of way.

5 comments:

  1. So well written Heather. You speak so passionately. I wish the people in power could read this and act appropriately. I also sincerely hope that selling platforms pay attention to this and put in place the necessary infrastructure to allow us to continue to be part of the global market.

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  2. Very well said Heather! I'm so hoping that the powers that be come to their senses and realize the monster they have created with the new regulations. I want to know that all small businesses, including beadwork designers, have the opportunity to use the current technologies to do business worldwide!

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  3. I love how you've stated the case, and the reasons you put forward that show what micro businesses actually accomplish within the economy. SO TRUE. I am off to share this post, I think you really get to the heart of everything very well. I will still be trying to support all of the EU designers as much as I can.

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  4. Great post with clear thinking. Glad to have found your blog!

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  5. An articulate post. I hope common sense does prevail!

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