How HMRC’s knowledge gap over digital commerce has created the abyss we’re all falling into. An actual example.

What’s becoming more and more apparent is how these new EU VAT rules on cross-border digital sales are based on thinking that’s fatally behind the times when it comes to online life. Well, the core definitions were agreed in 2008. Think how much has changed since? Back then, asking ‘do you store your selfies in the cloud?’ would have been meaningless!

I’ve been raising the issues relating to ebooks and why losing the option of direct sales is a real problem for me, for readers and for small and specialist publishers like Wizard’s Tower Press – and any number of others I could list. Last week I got back a message from an HMRC contact saying he had the solution! I needed to contact ThisCompany and everything would be fine!

No, I’m not going to name names. HMRC Guy was genuinely trying to help. This is the single most worrying thing, because he genuinely thought he had found me an answer…

I checked out ThisCompany – and again, I’m not going to name names because they don’t deserve to have the Internet fall on their heads either.

They’re a web-services company who do all sorts of things. If you have a whole load of content, they will absolutely turn it into an ebook for you, and their website helpfully takes you by the hand and explains all those tricky, scary, terms that might be baffling you, like epub and mobi and DRM, if you have NOT THE FIRST CLUE what you’re dealing with.

Yes, they will also put you together a nice website, with a VATMOSS compliant sales facility, and sell your shiny new ebook online through their own webstore. If you have NOT THE FIRST CLUE how to go about doing any of those things yourself.

Their highly competitive web solutions start from as little as £495!

Let’s analyse what this says about the thinking behind this fiasco. First and foremost it completely misses the point that 21st century digital enterprise means investing time instead of money to start a business. These days a single person can turn a good idea into a digital product and take it to a global marketplace using freely available computer resources and the marketing reach of social media and online interest groups.

I’m hardly technically minded and I don’t need to pay anyone to write a website for me. I put my very first site together in around 2000, using whatever that free Microsoft thingy was – Front Page? Then I learned some basic HTML programming and coded my own pages. It honestly wasn’t that hard and paying for domain registration and hosting was cheap enough. What doing that myself took was time, not money. In the decade since, online life’s got so much easier, with blogs and any number of quick and easy facilities available. I put this little site together in about an hour on Sunday afternoon!

I don’t need to pay anyone to put an ebook together for me. That’s perfectly doable too, if I’m prepared to spend the time coding the files once I’ve got a clean text. And that’s mobi and epub. Creating a pdf is two clicks in most software these days?

As it happens, I’ve chosen to work with Wizard’s Tower Press and Alchemy ePress to create my ebooks. I apply the universal equation of life to such things – Money = Time + Convenience. It’s more efficient and effective for me to spend my time writing and contract out the technical side to people who can do those things faster and more accurately than me, in return for their share of the revenue. Not for a whole load of money up front.

Five hundred quid is a London civil servant’s idea of an easy and affordable solution, is it? No, sorry, if I’m going to spend that sort of money on preparing my backlist ebooks (and I do), I’ll be paying to commission or to license cover art. If I’m preparing new, original fiction then that needs professional copy-editing. £500 would go a long way to covering either of those essential costs. I’m not about to pay for services I simply do not need in order to get a VATMOSS compliant sales portal. Not when spending that money means I won’t have the funds I need to make the ebooks fit for publication in the first place.

This also completely misses the point that I have a contract with Wizard’s Tower Press. We may be working from home but we’re professional businesswomen and that’s how you do things professionally. I’m not about to tear that up and set up some piddling solo operation. I want to work with Wizard’s Tower Press for all the benefits I get from the marketing and distribution that’s another part of their contribution, earning them a justified share in the revenue. I don’t want to be running a solo publishing operation myself. I’m a writer. I write.

Besides, I know and trust Cheryl, personally and professionally. Between us we know our industry and our markets thoroughly. I’m not going to trash all that and turn everything over to some completely unknown firm, who I’m sure are perfectly competent but who are clearly used to dealing with folk who have NOT THE FIRST CLUE about online life, let alone the arcane mysteries of SF and Fantasy…

This level of understanding of ecommerce has underpinned the system which we’ve had dropped on our heads. The knowledge gap – well, it’s more of an abyss, isn’t it?

So we have to make that clear. If you haven’t already completed the EU VAT Action survey, please take a couple of minutes to do that – it’s completely anonymous.

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3 thoughts on “How HMRC’s knowledge gap over digital commerce has created the abyss we’re all falling into. An actual example.

  1. Doug

    Well! and so true – well said. It’s unfortunate but obvious that there are large chunks of ‘government’ that simply don’t get how the world has changed. The new VAT rules are obvious, but it seems like digital gov simply hasn’t been able to get other departments to listen.

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  2. Geoff Austin (@gace123)

    This is amazing, 495 pounds! wow. I’m in shock. I suppose at least the HMRC person had the right intention and was trying to be helpful! But it just shows the lack of understanding which is the cause of the unintended disruption that VATMOSS has created. Unfortunately, its the micro business owner like you that is hit hardest and not the large international platforms. We’ve just released a free compliant sales checkout including, location evidence collection, the VAT calcs etc for our digital sellers. Unfortunately, we can’t do anything about the VAT registration fiasco, but we keen to support the community of digital sellers using Selz by making the sales process compliance as painless as possible. Here is more information if its helpful to anyone else looking for help with their sales process https://selz.com/blog/new-feature-eu-vat-reporting/

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