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The latest guidance (?) from HM Revenue & Customs on new EU taxation for digital products

Firstly, apologies to those finding all this stuff about VAT tedious and/or confusing. But it really does matter, and not just to authors trying to put out their own ebooks. Independent digital versions are increasingly the only way for readers to get hold of backlist titles and ebooks without DRM constraints.

Okay, here’s what little useful information I gleaned from yesterday’s HMRC Customer’s Twitter Clinic.

Let’s start with one definitive answer – which will interest the US authors of my acquaintance who sell direct or through co-operatives like Book View Cafe.

A Canadian knitwear designer asked
Question – As a Canadian selling online knit patterns, do I really have to track & pay #VATMOSS on the ~ 40 patterns/yr I sell in UK&EU?
Answer – Yes, if a digital service. Consider non-union MOSS scheme

So the next question obviously becomes – what is a digital service?

According to HMRC – “An e-service is one that is fully automated and involves no or minimal human intervention”.

So anything that’s an electronic product – ebook (fiction, non-fiction), music, training material, computer game, knitting or other craft pattern, the list goes on – that is delivered by any automated payment and download system falls under this legislation.

Okay, so what does ‘minimal human intervention’ mean?

At this point, HMRC’s answers started coming prefaced with ‘It depends’…

Q – Someone donates to my company in return for a digital “perk” (eg: through kickstarter or Patreon ) Do I need VATMOSS?
A – It depends on the nature of the perk.

Q – Are one-to-one web & graphic design services considered a e-service? Will this affect me as a freelancer?
A – Depends on whether the customisation is automated or involves human intervention. If latter, no.

Q – so web designers that design custom websites for clients are free from VATMOSS then?
A – Depends on whether the customisation is automated or involves human intervention. If latter, no.

Further clarification (I use the term loosely) from HMRC followed –“ “Minimal human intervention” is where a person takes some physical action for the service to take place.”

plus

“Emails & attachments are included if generated automatically by system following customer inputting their details and payment.”

But –

Q- If I sell a physical doc to EU buyer but then give them access to a free PDF version of it, do I incur VAT?
A – The new rules don’t apply.

And

Q – If a PDF copy of pattern/ebook is given complimentary with purchase of a physical copy of pattern/ebook is VAT owed on PDF?
A – No, it will not be subject to VAT.

Moreover, according to HMRC –
“Live webinars not e-service. If pdf and follow up recording are included in charge, will be treated same way as webinar…

If there is a separate charge it will depend upon whether the pdf or recording is an electronic service…

Virtual classroom combining live webinars, videos, pdfs would not be an e-service because of amount of human intervention involved.”

So we’re back to wondering what does or does not constitute the required level of human intervention.

Q- Does emailing with an attachment count as ‘human intervention’ when selling through a platform such as ETSY?
A- If they are physically submitting the email and it is not an automated process.

Q – But if the purchase is automated (ie via ETSY) and then I physically send the PDF in an attachment?
A- Payment service irrelevant to determine whether e-service.

Q – To be clear, regardless of how you’re paid, if you hand send out the download emails, it’s not an e-service?
A – That’s correct.

Similarly –

Q- Does that mean if I go back to the dark ages and manually send a download by file transfer it is exempt?
A -Manual downloads will be exempt.

Q – So even if I’m sending the exact same file to all customers as long as I do that manually myself I’m OK?
A – Yes, as long as email not automatically generated and you manually send it.

However –

Q- What about videos? If a customer purchases to get access to private videos (hosted on say YouTube or Vimeo)?
A – Sending the password manually by e mail does not constitute an electronic service so the new rules don’t apply…
However, if the service they are logging into is an e-service then it would be affected by the new rules.

Also –

Q – If sell a product & the user is redirected to a receipt page and they MANUALLY DOWNLOAD it, that’s human intervention, yes?
A – It is the provider’s manual intervention not the customer’s that is important.

So you can only avoid all this mess as a seller only by manually hand processing all orders and emailing files to customers.

Unlike for instance, Amazon who will continue to offer instant one-click payment and downloads. Right, so that’s going to make a customer’s choices pretty easy, eh?

Which brings me to the question of Amazon and other platforms like Etsy etc.

Q – How are devs selling apps on AppStore / GooglePlay into EU affected? Do the stores handle VATMOSS, or is it up to the dev?
A – Yes, App stores and marketplace will be responsible for VAT on dig services sold through their platforms.

Q- If u sell digi products via 3rd party platform but host selling buttons on ur own site do you have to register for VAT?
A- If providing a link to a third-party platform, no. If you sell through your own site, you would have to register.

Q – Can you provide approved list of 3rd party intermediaries that we can use instead of VAT reg?
A – Any sales platform is responsible if they initiate delivery or authorise payment process or set T&Cs.

Q – what if your third party platform disputes liability? Who is responsible in the meantime?
A – The third party platform is responsible

Q – what defines a third party platform and marketplace and what’s the difference between them?
A – A simple definition is that if a marketplace is responsible for authorising/allowing the download it is responsible.

Seems clear enough? Until people started getting into specifics

Q – Does this mean that the patterns I sell on @beCraftsy , @ravelry , and @EtsyUK are their responsibility for VAT?…
If I decide to sell via those platforms how can I be sure I am complying with law by leaving VAT to them?

Q – I believe you’re saying @beCraftsy @EtsyUK, etc are responsible, yet they say they’re NOT???

Q – I assumed that Paypal was more a payment processor than a marketplace.

Q – If ur PayPal account is linked to 3rd party, but the 3rd party provides order & delivery service, who pays VAT?

Q – What if one system initiates delivery (@fetchapp) and another authorises payment (@PayPal)? Which is responsible?

Q – But they authorize payments. I use Ravelry’s website to list patterns for sale, but PayPal handles the $.
Q- Are @gumroad included here? They said they are not but payment goes through them.

If there have been any clear answers to any of these questions, I have yet to see them.

And this is before we get into the considerable confusion of how traders with minimal turnover go about voluntarily registering for VAT in order to comply with VATMOSS. There are already reports of those who’ve tried being turned away as ineligible.

Another good question is how the advice to separate UK and EU trading into two separate companies despite both being part of the same overall trading business squares with other HMRC warnings that doing precisely this will be considered attempted tax evasion.

Reports are now coming in of small traders and companies simply abandoning e-commerce because of the complications and uncertainty, and also, the fact that getting it wrong will leave people liable to potentially unlimited fines.

At the moment, all my own e-publishing projects planned for 2015 are on hold. That’s the ebook editions of the Aldabreshin Compass series, The Ties That Bind novella and a related collection of short stories, and also a new urban fantasy novel. Because preparing those would require up-front investment of around £1500 from me for various art, map, editorial and other technical services.

Because I cannot get anything remotely resembling a clear answer on whether or not small presses are still/also liable for complying with these new EU VAT regulations as being part of a supply chain between the author and Amazon.

Until the small press I work with knows for certain what their liabilities will be, they cannot assess how/if to stay in business.

Clearly, if I was only publishing via Amazon, I’d be fine. But I do not wish to publish my ebooks with Amazon Kindle Direct Publishing as their terms and conditions are non-neogotiable and subject to change by them, at any time, without notice.

Publishing with a small press means I can negotiate a mutually satisfactory contract and also that small press can make my ebooks available via a range of outlets and in both .epub and .mobi formats rather than exclusively through Amazon.

So that’s where we’re at.

Is it too early for gin?

Names: A New Perspective. Well, mine, anyway.

You recall a while back I mentioned I was going a guest post as part of a whole series exploring the much debated topic of names within fantasy fiction?

Well, here’s my post, looking at why fantasy names really need their rough edges knocked off.

So you can read that while I try to cram as much work into this week as possible, since pre-Christmas break stuff really is going to have to happen next week, I can’t put it off any longer…

Farewell to a faithful feline friend

Our lovely, and beloved, cat Buzz collapsed and died last night. He’s been unwell for a while, with a digestive upset that’s defied diagnosis, despite our excellent vets’ best efforts. So the last month’s seen a succession of tests and treatments which have ruled things out rather than solved the problem. But he’s not been suffering and we had no reason to expect yesterday’s abrupt decline.

The sons are taking it particularly hard- Buzz, and Sable who died two years ago this month, were their childhood pets. Husband and I have at least been through this hateful business more than once before, not that it gets any easier.

So we’re all very shocked and sad today.

RIP-Buzz

Defiant Peaks – overdue website update

Ahem, after a genuinely helpful reminder from a kind reader, that doing this had somehow vanished below my To Do Event Horizon, I have put a Defiant Peaks page on my website – as you will see from the left hand menu bar. I have also tweaked the other Hadrumal Crisis pages a little, if you’re curious.

I will just say that I was absolutely up to my ears with Eastercon and Arthur C Clarke Award stuff around publication date – not an excuse but certainly an explanation…

What have I been doing since then? I keep promising updates. Soon, honestly…

Things I don’t want to be doing by torchlight on a freezing night at 11pm

Examining my car to see what damage might have been done by Snr Son hitting a badger while driving Jnr Son’s girlfriend home.

He is adamant there was a thud, but none of that ghastly crunch you get when a wheel goes over something. We think it must have been a glancing blow. There doesn’t seem to be visible damage to the car and he couldn’t see an injured beast at the side of the road when he stopped.

This is good on both counts, because many years ago, a pal did substantial and expensive damage to his car in such a collision. Badgers are solid beasts – so hopefully that means Brock will survive as well.

I am now going to bed. Most likely to dream of blizzards wrecking Eastercon if last night’s anything to go by.

I have a haircut booked on Wednesday. I am expecting the hairdresser to remark how much faster I’m going white of late.

A week to go to Eastercon and I’m thinking a decade ahead.

Those of you with any experience of con-running won’t be in the least surprised by my lack of posts here lately. For those of you who haven’t ever been involved in a convention committee, I can tell you that these past few weeks have been like trying to play a game of 3D chess while the Enterprise is under fire and taking evasive manoeuvres. Don’t misunderstand me, I’m not complaining. But busy doesn’t begin to describe it – since Christmas – for me and for the rest of the EightSquared Committee and Staff whose endeavours are absolutely heroic.

However I have just posted a very long piece on the EightSquaredCon blog. Because this past year has drawn my attention to the things which quite a few fans simply don’t know about conrunning. That’s no criticism, of conrunners or of fans. It’s just a fact I’ve become aware of. I’ve also realised some of these things could do with discussing, on the one hand before a real problem arises and on the other hand, to see UK fandom well-placed to move forward as next year’s Loncon 3 World SF Convention in London prompts a influx of new, enthusiastic people.

And yes, I am well aware that in some quarters, doing this is pretty much lighting a blue touchpaper and risking fireworks. It’s still worth doing. Because conventions are important to us all, readers, writers and fans of all aspects of the genre.

You can find my post on TheoretiCon 2023 here.

Disability and fantasy fiction – more questions than answers

Here’s an interesting question posed on Twitter by Sally Hyder – why are there no disabled female heroes in books? Is this because readers won’t accept it? Or is that the publishing fear, not the reality?

I’m indebted to Kate Elliott for flagging up Oree in N.K. Jemisin’s The Broken Kingdoms as an example of such a female – while acknowledging they are extremely rare.

Why is this? I don’t have any answers – but I am now pondering on my own, related experience. I have a crippled male hero in The Chronicles of the Lescari Revolution – in modern terms, he has cerebral palsy and is closely modelled on a friend of my teenage years with CP in what he can and cannot do, his attitudes, frustrations etc.

Neither editors nor readers have had any problem with him as a character – indeed, he’s been seen as an interesting twist on Alpha-Male heroes. But when we were discussing cover art, one major US book chain’s representative was very, very anti the notion of a man on crutches on a book jacket – he reckoned that would be the commercial kiss of death.

Well, we’ll never know. Subsequent reader reaction would indicate that was an unrealistic fear. But I wouldn’t rule it out entirely. I’ve had too many well-informed Americans conclude that the (superb) cover art contributed to Southern Fire’s failure to find a US audience.

That’s a male disabled hero. What about a female one? I would be much more cautious about writing one of those – especially following some hostile reader reaction to Lady Zurenne in the Hadrumal Crisis books. More women than I would have expected have been infuriated by her inability to cope – in the first instance – with being widowed and subject to male domination in a patriarchal society. They have found her thoroughly dislikeable – without, thankfully, condemning me as a betrayer of the sisterhood. That would be difficult given the presence of a very empowered magewoman, Jilseth, in these books.

The thing is, I can understand that reaction to some extent. I have read far too many books in the past couple of years where a woman’s role is still to be marginalised, patronised, passive and victim – apart from the minority of instances where she’s a menacing and/or vengeful bitch.

So I personally would be very wary indeed of including a disabled female character in a book without her condition being absolutely central and necessary to the plot. And then I would have to work very hard indeed to make her absolutely not a passive victim – and that would be very difficult indeed, in a narrative set in any kind of pre-modern society where reader expectations would be set by their own assumed knowledge of the historical disempowerment and invisibility of such individuals.

Now, having friends and family who’ve lived and worked abroad, often in developing countries, I know for a fact that viewpoint is more than a little skewed. When my parents lived in West Africa, we would see men and women who’d lost limbs to accident or disease out and about, making a living. Because otherwise they’d starve. We would see the mentally impaired and infirm being cared for by their families. A society needs to attain a certain level of wealth before they can warehouse the disabled out of sight.

But how to convey to the reader that their assumed knowledge is wrong without the benefit of out-of-story footnotes? It would be a very interesting writerly challenge – and if I had the right story, it would definitely be worth trying. But it would have to be for the right story, not just trying something for the sake of it.

Oh and by the way, any writer wanting to tackle this challenge should start by reading books like Sally Hyder’s own memoir, Finding Harmony. Sally has Multiple Sclerosis, not that you’d ever know it from her online conversation, unless she’s in the middle of plotting something like getting to the top of Ben Nevis in a motorised wheelchair.

As I say, it’s interesting question – and I don’t have any answers. Anyone else got any comments or observations?

Some thoughts on debut novels, mine 14 years ago, and others today.

This morning I am particularly taken with this review of The Thief’s Gamble over at Fantasy Review Barn. Not because it’s a gushing outpouring of praise – it gives the book three and a half stars. Fair enough, everyone’s entitled to their opinion and the reviewer here has read the book thoroughly and thoughtfully.

What really makes me smile is reading “I was fine with the generic feel of it, but be aware that no new ground was broken here.” and ” It hits all the nice fantasy tropes, and doesn’t see any reason to bend them, break them, or subvert them.”

Okay, that’s the view of this book by a new reader in 2013. Back in 1999, the reviews said things like “pleasing to find a female lead who’s properly representative rather than the usual tepid mix of heroine and victim.” and ” a beautifully drawn world with a rich history, interesting and realistic characters and a plot that drags you along at breakneck speed.”, “What’s different and interesting about this book is what Ms McKenna does with it.” And more besides.

So why am I smiling? Because this shows just how far the epic fantasy genre has grown and developed in this past decade and more. Readers are used to so much more in terms of realism and depth of plot and characterisation, more complex themes and subtext.

Not that this should come as any particular surprise to fans of our genre. I’m currently assessing four debut novels for my next Albedo One review column. To be specific, I’m reading The Throne of the Crescent Moon by Saladin Ahmed, The Heir of Night by Helen Lowe, Earth Girl by Janet Edwards and Gideon Smith and the Mechanical Girl by David Barnett. Time and again, while reading, I have noted down some instance of an interesting new take on what have become standard, even over-worn plot or character elements since I started writing myself.

I think this is really great.

Right, I had better get on with some writing on my current projects.

(Meantime of course, if you’re curious to read The Thief’s Gamble for yourself, you can now get it in your preferred ebook format from Wizard’s Tower Books (worldwide DRM free) or your ebook retailer of choice. This message brought to you by the Jules Convention Travel Fund 2013)

“It’s a Literary Festival but not as we know it, Jim!”

I’ve just posted a piece on the EightSquared Blog thinking about the distinctive depth and breadth of programming at SF conventions, compared to the more typical lit fest.

You can find it by clicking here.

Incidentally, I hope to blog as usual here rather than just posting links, but as I’m sure you appreciate, between now and Eastercon, I am going to be pretty busy. In a good way.

If you want to offer your own perspectives, you can do that here or on the EightSquared blog as you prefer.

Right back to the To Do List. This morning? An updated introduction for the ebook of The Swordsman’s Oath…

Christmas knitting, cooking and some reflections on family history

You might want to settle down with a cup of tea and a mince pie, since this does run rather long, even though these are only the briefest of the stories I could tell…

I’ve been knitting for my new nephew this year. I like to knit and sorting out needles and wool always makes me think of my Great Aunty Ivy, eldest of my maternal grandmother’s sisters, who taught me to knit and crochet when I was about nine. When she died, all her needles, hooks and the Singer sewing machine that had been a wedding present to her in 1919 came to me. It still has the instructions including notes on the correct needles to use for whalebone and an attachment for goffering the frills for maids’ caps.

Ivy hadn’t been expected to live to be married, having had a life-threatening goitre requiring a drastic operation in 1917. Gynae complications meant she could never have children and then she was widowed in the early 1950s, when her husband had a brain haemorrhage. But you just have to get on with life, she told me. So she did, robust in her opinions and in her vegetarianism, a staunch advocate of that since the 1920s. Woe betide anyone foolish enough to dismiss a meat-free diet as hippy faddishness in her hearing.

Born in 1900, she was, as she liked to tell us when she visited my grandparents at Christmas, the last Victorian in the family. Not that she had much time for ‘Victorian values’. I remember, one summer visit in my early teens, as we sat knitting together, her making some remarkably forthright enquiries as to what I knew about the facts of life. Once she was satisfied that I was properly informed, she told me about the day she and Betty, her other sister, had needed to reassure my startled grandmother returning from a bike ride with a bloodstained skirt. Ivy had only recently learned the full facts herself, on her wedding night when her husband had found himself patiently explaining what he was trying to do with and to her. None of the women of that generation had any objection to me, my siblings and cousins co-habiting before marriage. Very sensible, they called it, out of their husbands’ hearing.

The last conversation I had with Aunty Ivy, not long before her death, included her asking me all about the boyfriend I was living with, since he had been invited to my grandparents’ 80th birthday party, mostly so my Grandmother could meet/inspect him. Ivy, at 88, had been too frail to attend. Apparently the report was sufficiently favourable that they had decided between them he would make an excellent husband. They weren’t wrong. We’ve been married since 1989.

I’ve been thinking on my Grandmother today as I do some Christmas baking. A recent newspaper article agonising about how to bake a decent chocolate cake baffled me. I was taught to make a sponge mix with one quarter of the flour by weight replaced with cocoa powder. Job done. I’ve also made mince pies today, using the pastry recipe my Grandma taught me; half fat to flour, fat consisting of half butter* and half lard*. They always come out beautifully.

(*goat butter since I can’t eat cow’s milk and Cookeen if vegetarians are expected)

Grandma worked in ladies’ fashions at Bourne & Hollingsworth, Selfridges and lastly at Harrods in London before the Second World War. She was there during the Abdication Crisis, when the shop girls regularly overheard the Countess of Wherever discussing the scandalous details of Edward’s infatuation with Wallis Simpson with Lady Whosit in the changing rooms. When the first reports appeared in the foreign press, all the staff were summoned to a meeting where they were told if anything appeared in the British newspapers, they would all be sacked, regardless of whether or not such tale-telling could be traced back to the shop. My Grandmother was quietly unimpressed by bombastic male authority, I realised, even when Grandpa was laying down the law as he tended to on a fairly regular basis.

Though Grandma and her neighbour did listen to the ARP warden who told them off for going out and stamping on incendiaries in WWII, to put them out before the flames took hold. Air raids were a constant threat as she lived on the South Coast with twin baby girls and a husband away doing air traffic control for the USAAF. One particularly bad night, she couldn’t face going down to the shelter for the third or fourth time so she simply got under the bed with both babies and the dog. That’s where she discovered my Grandfather’s tobacco ration from the Americans, which he was drawing even though he didn’t smoke. Remembering cigarettes were supposed to calm the nerves, she broke open a packet of Lucky Strike and lit up. Because you just had to get on with things. There was no point in making a fuss.

When I make my mince pies, I used the pressed steel tins we got from my husband’s grandmother. Well greased, things never stick to them and the pastry is never soggy on the bottom. Steel, not stainless steel, mark you. So they need to be washed promptly and then put in the cooling oven to dry.

I met Nan when I was living here during a year’s medical leave from university. That was a tough year for all sorts of reasons and I used to go and see her when I needed some company. She was calm and quiet and welcoming and we talked about days gone by in the Cotswolds and her life in service as a daily cook to a local wealthy family and what was on the telly and oh, all sorts of things. She and my husband and his brother were all very close since she had helped see them through the tragically early death of their mother from cancer. In one of his last conversations with her, she told my husband ‘you should marry that girl’. He told her that he would, even before he’d asked me. Like my Aunty Ivy, Nan could see we were right for each other long before we were certain.

I have had to replace the basin for the Christmas pudding this year. Nan’s has developed an ominous crack so we’ll use it for fruit from now on. When I was younger, family Christmas puddings always came from my step-father’s mother. Granny was the eldest of nine born on a Lincolnshire farm just before the First World War. Her mother died young so she pretty much raised her brothers and sisters. She still found time to help out her neighbours though, particularly the ‘city girl’ a local gamekeeper married. Other locals were inclined to look on with disapproval. Granny called round to see how the new bride was getting on – and found her in tears, trying to pluck a hare. So Granny helped her skin and cook it, and kept an eye on her thereafter. Right into her latter years, Granny was quite capable of stopping to wring a pheasant’s neck when she saw a car clip one and leave it injured by the side of the road. And take it home for Sunday lunch.

She trained as a nurse and worked ‘on the District’ all her professional life, with that same blend of compassion and practicality, driving her Morris Minor all round South Yorkshire. She spent the Second World War nursing the wounded as well as raising her young son with her husband away serving as a radio operator on Lancaster bombers. Just getting on with it.

Meantime, my Granny McKenna was getting on with things in Plymouth, all through the air raids while her husband worked as a fitter in the Royal Dockyards and she raised three children including one hospitalised with osteomyelitis after breaking his leg. The doctors wanted to amputate but Granny wouldn’t let them, insisting that she would nurse my uncle through the bone infection and she succeeded. She did all this while wearing a fearsome back brace of leather and steel which fascinated me and my brother as young children. As a young woman just over from Ireland, she’d been hit by a brewery dray and when she’d recovered consciousness, she walked to the hospital with a broken ankle and several fractured vertebrae.

She’d come over to England to be as a priest’s housekeeper, initially working at the De La Salle teacher training college in London. An orphan from the Magdalene Laundries, that’s what she’d been trained up to do with her life. Except she met my grandfather who was working as a groundsman at the college and that was that. In her sixties, when she applied for her first passport, Granny McKenna discovered that the details the nuns had supplied about her original name, age and birth date were all incorrect. So she simply celebrated two birthdays for the rest of her life. There was no point making a fuss. Incidentally, she needed a passport to go on a parish trip to Lourdes. Not on her own account, you understand. She was going as a helper for those unfortunate souls who needed such a blessing.

These are my foremothers and I always find myself remembering them with admiration and affection at Christmas.