Archive for December, 2014

The VAT Apocalypse

Posted: December 13, 2014 by eibonvale in News
Tags: , , ,

People will hopefully be aware of the storm that has recently erupted concerning the new changes to VAT legislation in the EU – and if you are not aware of it then I suggest you make yourself aware of it ASAP since it will affect pretty much everyone and not in good ways.  Like many, indeed like most it seemed, I only found out about this when it all broke on Facebook a couple of weeks ago and since then the news has only got worse.  Bad enough to drive me to write an activist post here on the Eibonvale blog because this may well force the closure of Eibonvale Press and because the potential effect on other small publishers, writers and readers could be severe.  Yet I get the feeling many don’t even know about this yet.

In a nutshell, what has happened is that they have switched from charging VAT in the country of the seller to the country of the buyer – but most cripplingly of all, they have removed any VAT threshold.  They have done this ostensibly to prevent tax dodging by companies such as Amazon, but in the process have caused utter havoc.  This new system means that anybody who makes a direct sale to an EU country, even just one single sale, now has to register for vat in that country (or go through the UK’s VATMOSS system, which doesnt really negate any of the problems).  Initially (from 1st January) this just applies to digital products (ebooks for example) but it is clear they also plan to introduce this for ALL products at some unspecified but not too distant time in the future.  This would include paper books.  Not many countries are VAT-exempt for books, so any sale to a country that would charge vat on them will land you liable for a very very complex procedure indeed.  And this applies globally.  The number of ways this is impossible and ridiculous is quite large – and to expect a small enterprise that might consist of just one person making a tiny bit of money out of something they love to cope with all that is laughable.  But this is not a question of laziness or willpower – it is physically impossible for someone with a tiny shop powered by paypal or something to gather the required data (PayPal have actually stated that to supply sellers with the required data would be against the data protection act).  The only options for sellers then are to restrict EU sales to a major channel like Amazon and refuse to deal direct, or if that’s impossible, to quit entirely.  It is already being estimated that tens of thousands of microenterprises in the UK will do just that – while the number impacted easily reaches the hundreds of thousands, many of whom still seem unaware of the problem.  Tens of thousands of dreams snuffed out by one badly thought out bit of legislation . . .

I also need to emphasize just how chaotic the release of information about this has been.  Tempted as I am to call HMRC almost criminal for their handling of this, I don’t suppose they really like struggling to cope with impossible demands from the powers that be any more than we do.  Indeed, it seems the big boys are in almost as much of a state as we little’uns.  News has just broken that Google will be basically halting the provision of certain commercial services into the EU – and if they can’t cope with this, how the heck are we supposed to?

To say I am angry right now is the underestimation of the year!

A number of things beggar belief here.  If you will permit me to stray into rant territory for a moment, I will list some of them:

  • It beggars belief that they care so little about small enterprises that they would basically crush them without a thought.
  • It beggars belief that people would knowingly introduce a system that impedes cross-border trade just when the world is globalising and when a global awareness is only getting more important.
  • It beggars belief that legislators would attempt to ‘punish’ big companies like amazon by basically handing them a monopoly on cross-border sales on a plate.
  • It beggars belief that they would introduce something that will drive many many people back to government support/welfare precisely at the time they are trying to reduce welfare bills in the cruelest ways possible.  And indeed when they have been trying to get people into these very enterprises so the government can massage their unemployment figures.
  • It beggars belief that the EU would introduce something like this at a time when many are already suspicious of it as a viable entity and are pushing for independence.  Indeed, the more I think about it, the more it seems that the EU might just be committing suicide here.

And this is where I come to the effect on Eibonvale Press.  In terms of ebooks, we are safe because the few we have released so far are handled through Amazon.  However, when/if this expands to include paper books, then things could be very different.  It is not possible for me to survive on sales through Amazon and ‘the system’ since I earn almost nothing after their cut.  I would have to jack the prices up massively.  And if I refuse to sell to EU countries and instead direct those buyers to Amazon then I would still be taking a quite major cut in income.  It may be that this would be the last straw that forces me to close the press down as simply no longer viable – at least to new releases.  I hope not – but right now the future is not at all clear.

What is clear though is that if you run a small press, you should be watching this very carefully and preparing to kick up as much of a stink as possible.  Likewise if you are a writer since the last thing we need is artificial restrictions on where or how books can be sold.  And likewise as a reader since these regulations will effectively erect a sales wall around the EU that is impenetrable (legally) by many small companies who are unable or unwilling to work through Amazon etc.  If you are in the EU and not sure how this applies to you, just ask yourself – are you really happy to live off an Amazon drip-feed exclusively and live in a world cut of from small enterprises?

For more information, and things that can be done to fight this, I would suggest you check out http://euvataction.org/.  I know that these days we are saturated with causes and horror stories and social injustice – you can’t read the news or glance at your Facebook feed without seeing something that makes you want to punch the wall – but I would suggest that this is one of the biggest and nastiest.  Indeed, I almost feel as though I am fighting for my life.  After all, what am I without Eibonvale Press and the other things that are important to me?  Am I just some little insect that the EU can just squash without even noticing?  No fucking way!

The fix for this, if it can’t be just dumped in the cesspool of shamed history, would actually be very simple.  Preserve the vat threshold.  That is vital for any small enterprise to function unimpeded.  Every way one examines this, the costs are going to be high – in terms of lost culture and potential, closed enterprises, increased benefit claimants, increased hardship, loss of diversity, loss of access to material etc. If we can at least force this seemingly obvious update to the system then we might still have a world in which small enterprises can flourish and in which people can still have access to material in a global sense – a world in which dreams can continue to exist and mean something.

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