I’d agree silvapagan, unlike Folksy Etsy is going to be more complicated. I’m still waiting to see if they are going to offer any system changes to decide what to do there, and obviously seeing the new definitions today has altered my previous thinking - in the meantime I’ll only launch new tutorials here on Folksy as it is (ironically through lack of functionality) compliant!
Folksy if you have digital downloads on your IT workplan I’d not bother unless you can offer sellers the option to restrict country by country…
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The VAT MOSS situation is something we have been following keenly. Our accountants are the people we are taking a lead from and - much as the information in this thread has stated - a lot depends on what is meant by “digital” and how much “human intervention” is required. It’s fair to say that HMRC are not specifically after sole traders selling knitting patterns, but those selling software-as-a-service to EU customers so whilst you need to comply I would imagine they will take your interpretation of what human intervention is required for your product.
As the ruling beds in we’ll get a clearer sense of what actions you need to take, if any and we’ll let you know via the seller email and on the blog.
Thanks,
James.
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There’s an update here: https://www.enterprisenation.com/blog/posts/exclusive-hmrc-update-on-vat-moss
oh here’s the new EU wide petition
I’ll sign it tomorrow and leave a comments just have to think about the wording
I was talking to our accountant about this the other day (my husband sells digital software online) and he said that if you are selling through an agent, and they deal with the VAT, then you are exempt.
I guess that Folksy would be ‘the agent’ in this case.
Only if Folksy was offering our files via instant download which they are not. So they will not be our agents.
But the other place is…
indeed they do and they don’t appear to be doing any thing about it at present. I’ve been following their forums since I found out about it and people started sending me lots of different links.
From what HMRC has said so far, it’s fairly certain that Folksy would only have to be responsible if they offered Instant Downloads for digital items.
But and it is a big BUT, HMRC have made it quite clear that these new rules will be implemented on physical goods from as early as 2016.
Then everything sold to EU country will have to have VAT charged on it at the rate of VAT in the customer’s country.
Also it is not an option to not supply to those countries because that would be discrimination.
So that would effectively mean the end of online selling by small traders. Crafts people would have to rely on craft fairs and personal sales and commissions locally, or at least within their own country. Way to go EU. 
@silvapagan - I really don’t think that the various online platforms like Folksy, Etsy, NOTHS, Ebay etc etc are going to give in and stop trading in the EU.
It will just mean that they will have to man up and get the programming in place so that the VAT can be charged and paid over and it will be the platforms that have to comply not the individual traders. HMRC will not go gunning for the little people and have already said that it is the selling platforms who need to comply.
Shirley x
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I don’t really understand why it would be the selling platforms who would need to charge VAT - surely VAT is a tax on goods/services, so the onus would be on the supplier of those goods/services to collect the VAT. Folksy only supply the platform as a service to us, and they already charge us VAT on listings/commission fees. Are HMRC now saying that Folksy are providing the goods/services to buyers, and we’re not? In that case we would actually only be selling to Folksy and they would be re-selling to buyers, presumably on a kind of sale-or-return basis? But then they would have to charge VAT on UK sales as well…
…and I don’t get the bit about discrimination either. Many companies already choose to sell only within the UK, or their own country. Why would it suddenly be deemed discrimination (according to the EU) if it isn’t now?
It’s complicated Christine @ciesse and the new rules that apply from 01/01/15 are currently only on digital services to EU countries.
Most UK sellers on third party platforms aren’t currently registered for VAT because their total sales turnover is less than £81,000 per annum. However the new rules for EU sales have a nil threshold because all the EU countries cannot agree on a threshold limit and because some of them currently have a nil threshold that is the threshold which has been set for EU sales. It does not affect domestic sales for each EU country. Therefore UK selling to UK is as it has always been.
If the new rules on digital services are rolled out for physical goods as well, it has not been made clear whether it will also be a nil threshold. HMRC have so far ruled that it will be third platforms which will be responsible for adding the appropriate VAT to each sale to an EU country and paying it over to those countries.
I really think that the powers that be in EU have not though this through at all and how it will impact on small businesses. They are just concerned with catching the big boys like Amazon and Google who currently use Luxembourg as their EU base because it has the lowest VAT rate.
Here is a link to a survey which you can take part in to collate the implications of the EU VAT rulings on small businesses.
It won’t just impact on the sellers on Folksy, but on the third party platforms themselves.
So James @uxtest maybe Folksy should fill one in as well.
http://euvataction.org/take-action-now/complete-the-survey/
Shirley
If Folksy (as an example of a TP platform) is adding VAT to EU sales, why wouldn’t that apply to UK sales too, as they are VAT-registered? And how could they prevent individual sellers selling to UK-only?
Also, if sellers are selling directly from their own websites, surely they would still have to charge VAT on EU sales? Or would direct sales be exempt? In which case, TP platforms would not be competitive.
I don’t really understand why they’d need to do it for all sales myself as at the present time customs collect any import /vat when you import so surely why can’t they simply carry that system on.
I understand why they had to do it for digital sales as so many large companies were hiding sales as their was nothing going through customs.
The whole thing was not really thought through properly but the only thing we can do is either swallow it down and try to work within the new rules, or close down.
OR we can make a right sink and join our fellow EU members and petition Brussels
Here is the Petition to Brussels for all EU members
I’ve no idea Christine @ciesse it’s just one big mess!!
Shirley x
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On a more cheerful note I’ve just had an email from Folksy congratulating me on 500 sales!!!
BUT my knee operation has been brought forward and I go into hospital on Monday to get a new knee!
So will bow out of this discussion for the time being and will be shutting up shop later tonight.
Merry Christmas everyone!
Shirley x
Well done on the 500 sales Shirley! Good luck with the new knee, hope it all goes well. And have a happy Christmas if you’re not in the forums again before we get there 
Oooh, good luck with the op, Shirley!
Congrates on the sales figure Shirley and all the best with the knee operation
Have a great Christmas Break and here’s to a quick recovery.