Update on how to tell EU Commissioner Andrus Ansip your new digital trading difficulties.

EU Commissioner Andrus Ansip, who’s responsible for European Digital Single Market initiatives, is one of the key people we need to convince of the damage being done by the new requirements to tax digital products at place of consumption, not supply.

He’s starting to realise there’s an issue here… and has arranged this Twitter chat. for Monday morning, 23rd February.

Over on the EU VAT Action website, we’ve posted details on how to make the best of this opportunity.

Which is all very well, if you’re on Twitter, live in the same time zone, and not in paid employment at that time, because you run your digital business during your evenings and weekends…

well, firstly, if any of those barriers mean you won’t be able to participate, drop me a line with what you want to say, and I will do so on your behalf. You can also contribute via Facebook if you wish – details on that EU VAT Action update.

Secondly, EU VAT Action is having another online action drive from 5pm GMT on Monday. We really, really need to alert other European finance ministries and tax authorities to the problems all this has created, so we’ve found email and contact details for as many of them as we could, to help people target their communications most effectively.

They need to know how #EUVAT is hurting your business. The more hard data and detail you can give, the better.

They need to know why third-party platforms and tech solutions aren’t the answer. Tell them how much those would cost you – and how they don’t even necessarily help.

They need to know digital microbusiness needs a threshold specifically, and only, in relation to this law, below which they’re exempt from this particular legislation only.

Below that threshold each country’s domestic VAT rules for small businesses would continue to apply, so member states’ national sovereignty over taxation would be untouched.

Making ourselves heard in Brussels!

Okay! The pressure we’ve been applying through EU VAT Action – along with every letter and email you have all been sending – is getting results.

We convinced two London MEPs to present our data and case studies to Donato Raponi, Head of VAT at the EU Commission.

As a result he’s agreed to meet representatives from our group, and others, within the next ten days.
More details as arrangements are finalised.

Meantime, help us keep up the pressure with those letters and emails to your MEPs, MPs, trade bodies, professional associations…

Let’s make our voices heard!

Full update from EU VAT Action

Twitterstorm ahead – EU VAT Action Tuesday 16th December 10am GMT/11am CET

The EU VAT Action Team is organising another Twitterstorm to bring more attention to this issue and to give the small business community a voice.

Please make yourselves heard on Tuesday 16th December from 10am GMT/11am CET using the hashtag #EUVAT. For those of you in other time zones, for whom this isn’t possible, feel free to join in through the day whenever you get a moment!

We need to convince the bureaucrats who wrote this legislation that there’s a massive gap in their understanding of how eCommerce works and that the implementation of these new laws will impact the tiniest and most vulnerable businesses all over the world.

This may seem like a UK problem but that’s merely because of the English language’s role in e-commerce and the UK’s regulatory framework promoting such start-ups. It is a European problem because these same regulations will stop any other countries’ initiatives towards building their digital economy before they even get started.

It’s going to hit customers too. Payment providers Selz and SendOwl are already rolling out the option to exclude EU customers if you use their systems. So much for the world wide web and no borders or barriers in cyberspace.

Accounts which will be targeted as part of the Twitterstorm include:
https://twitter.com/pierremoscovici -Pierre Moscovici Commissioner for Economic and Financial Affairs, Taxation and Customs
https://twitter.com/GoettingerEU – Günther Oettinger, EU Commissioner for Digital Economy and Society
https://twitter.com/Ansip_EU – European Commission Vice-President for the #DigitalSingleMarket.

For the UK in particular, https://twitter.com/DavidGauke – David Gauke – MP for South West Hertfordshire and Financial Secretary to the Treasury.

He’s central to any UK decision to suspend the implementation of these new rules, which can still be done, citing the unforeseen impact on a particular, and vulnerable, business sector and in order to re-examine the changes in online commerce since the foundations of this regulations were set down in 2008.

And feel free to contact these particular accounts at any other time!

Meantime, the EU VAT Action Team has been conducting a EU-wide quantitative research survey to assess the financial and human impact of the new legislation on micro businesses and sole traders. Thousands of small business owners have responded already. The initial results are shocking:

• Only 4% expect to be able to comply with the legislation in time.
• 60% of affected businesses sell direct to their customers, rather than through third party platforms such as Amazon or the App Store.
• 45% are going to have to make major changes to their business this month – either removing all EU VAT-liable digital products from sale or excluding EU customers altogether.
• 50% believe they won’t be able to comply, at any stage.
• 20% will be putting up their prices to consumers, to cover the additional VAT and the administration / new software costs.
• Consumers will be hit by price rises and a reduction in choice, as many sellers will restrict the countries they sell to and stop their digital downloads.
• 10% are going to be closing their business completely in less than three weeks’ time.

If you’re going to be badly affected and are willing to go on record as a case study click here.

If you haven’t yet had a chance to do the short and anonymous survey please click through and do so.

Sign the EU Petition – and encourage friends and family to do the same.

This really is an emergency now. Everything and anything you can do to help is invaluable.

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.

Update 9th December – Lots of Conversations.

The group of us who coalesced via social media and shared concerns about this, on behalf of everyone we knew affected, are now officially the EU VAT Action Team. We’ve been talking to the media, here and in Brussels, to civil servants and government officials. It’s been busy…

I’ll quote you Clare Josa’s latest update, as I can’t put things better if I tried.

“We have had discussions with a senior member of Vince Cable’s team throughout the past two days and the Department IS sympathetic towards our cause. They will be putting out a further statement tomorrow which will hopefully clarify things and update us on the progress being made on our behalf.
We are also expecting an announcement from HMRC very soon about the ‘how to’ on keeping your UK VAT exemption and some other news.
Basically, I know this update sounds a bit vague at the mo, but if this comes through as we are being led to expect, it will be positive news.
More soon hopefully! Thank you ALL for your hard work, your patience, your intelligent questions, your sense of humour and your dedication to finding positive solutions.

And let me add my own thanks for everything you’ve all done, merely by signing up here, by spreading the word, by writing letters, by signing the online petition, by keeping up the pressure overall. A conversation involves both sides listening as well as talking and it’s seeing those of us speaking up have got such substantial backing that’s secured us a hearing with the decision makers.

Further updates tomorrow!