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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?

How and Why Test-Readers/Copy-Editors/Any Fresh, Thoughtful Eyes Improve Creative Writing

This is really interesting. If you look back at the short story I posted yesterday, you’ll see that I have now edited one word. I have changed the line in question to

noting which pupils could now usefully be directed towards reading Jane Eyre and Northanger Abbey.

Because in the comments on my main blog, a reader wondered why only girls should be directed towards those books, as the initial text implied. That’s a very good question and the quick answer is self-evident. There is no good reason why only girls should read Austen and the Brontes. Indeed there are many good reasons why boys should read the full range of such classic literature.

The longer answer is more complex and more revealing. Writing this story, I was drawing on my own memories of A Level English, where, yes, we studied Keats. This is particularly the case because that first impulse to write this story was prompted by a friend I have known since that very class. It was her helpful phone that turned ‘varifocal’ into ‘verifcation’. We went to the same girls’ grammar school, so in my mind’s eye, the class I’m recalling is entirely female.

Then there’s the Twilight angle which you’ll see in the story. Again, I’m drawing on my own experiences going into schools these days and teaching creative writing. It’s invariably a dreamy-eyed girl who askes me if I’ve read Twilight. (To which my answer is always,’No, I haven’t got round to it yet, but I do read Kelley Armstrong and Patricia Briggs and now you’ve read all the Twilight books, why not give them a try’.) So once again, in that particular paragraph, my writerly subconsious is full of girls.

The key thing here is that while the longer answer is very illuminating, the shorter answer is the one that counts. Because there is no good reason why this line should only refer to girls. In fact, changing the word to ‘pupils’ actively improves the story in several subtle ways.

So there you go. A real-life, real-time example of the editing process and what it contributes to the books we read. Isn’t that great?

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…