Evening Folks! This pic is of the first full moon of the new year, 2015. The first full moon of the new year, traditionally called the Wolf Moon and was associated with the hungry winter months still to come and takes it's name from the howls of packs of hungry wolves stalking the edges of villages.... One reason to be glad I live in Ireland/UK.... not many wolves here... unless of course you consider the tax man...
The EU have just introduced a new law governing the collection of VAT tax from folks who sell digital items via the internet...that would be me, and possibly you, if you sell even so much as one knitting pattern/.svg cutting file/digital scrapbook files to anyone living in the EU. And nope, it does not matter where YOU live, if you reside on planet earth and are selling digital downloads to anyone in EU, you need to know about this. Google EU VAT and you will be sure to come across the info.
In their wisdom, the EU have decided that VAT must now be paid to the country that the purchaser resides in, rather than in the country where the item is being sold, as was the case previously. There are about a million reasons why I believe this is not a good idea, but the one most important to you and me is this - Instead of sending in a couple of tax returns each year to HMRC (the tax folks in UK), If I want to continue selling Digital downloads, I am now expected to complete and submit 4 VAT returns per year to EACH of the 28 odd EU countries, over a possible 75 levels of VAT.
Now, WMS is a small company, a tiny company in fact. I made the decision to stay small so that I could manage it while I raise my children. I do everything myself, I design the stamps, I design and produce the packaging, I handle orders and customer queries, I handle all the site graphics, I manage all of the stock. I have a US shipper who manages the US orders, but I handle the rest of the world. I do this partly because I wanted to be able to control my output, but also because I wanted to keep costs down as much as possible so that I could someday make a living from this and contribute to my family financially. Thing is, I buy only the best USA polymer, I use only the best USA manufacturers and I have all those goodies shipped all the way over here from USA, so my costs are already high compared to large corporations that can purchase in bulk at better prices from far overseas.
Now the EU and government have decided that I, and thousands of small companies like me, should take time out to submit over 100 tax returns per year...ok...sure...I don't actually need to sleep anyway....
You will see, very soon, that thousands of small digitally based companies will have to close. Thousands of small mom and pop independents, just like me, will not be able to afford the accountancy costs. Folks like me who were hoping to expand their digital businesses will have to shut up shop, or supply through third party sites such as amazon, where prices will no doubt rise to cover the extra costs.
Soon, when you go looking for cutting files and knitting patterns, scrapbook files and crochet patterns etc, you are not going to have the same wealth of choice that you did before - especially if you live in EU. I know of many, many stores who are currently, as we speak, having their sites reconfigured to block all EU customers. I now of many, many folks raising their prices to try to help and offset the costs of all the extra admin and accountancy.
Well I'm not quitting. I am working a way around this. I have been working on this all over Christmas and New Year, I spent the entire night of New Year's eve and into the next day taking all the saleable digitals down off my website so that I would not be breaking any laws when they came into force on the 1st January.
I am working on new settings for digitals at the store and once I have fixed this I will be relaunching all of our cutting files which match stamps as FREEBIES. All templates and other files will be available in the same formats as before, but instead of an instant download, we will now be required to email them to our customers. This will keep us compliant in 2015.
The really horrendous information is that they intend to apply this new VAT law to all physical goods from 1 January 2016. So anyone, anywhere, who is selling stamps, inkpads, farmers wellies, sausages...you name it, will have to register and pay taxes in the EU countries that they are selling to.
At this time I have an outline plan of how we are going to handle this nightmare when it comes, but I will be evaluating other ideas and trying to get the best possible solution into place before the deadline.
I just wanted to let you know what's going on and why WMS has not yet begun our 2015 release program. Like many companies we only heard about this in the couple of weeks leading up to Christmas. In my opinion HMRC did not communicate this new law in either a timely or effective manner and many folks were caught out and either closed their stores completely before January 1st, or have already blocked EU buyers. Many Etsy stores are still on Vacation mode while this is being grappled with.
I want to thank you all for patiently waiting for us to manage this curve ball and get back into our scheduled routine.
Sale - advance notice
Our next release will be in February, but before that we will be having a sale at the store. I am going to clear out some inventory so that when I come to rejig the store settings to cope with this new law, I won't have so many products to wade through. Thank you for your patience.