An update; just got my first sale using Payhip. They took 13p commission on a £2.50 sale immediately. All nice and tidy.
Their analytics are very clear too, and you can export your sales summary.
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Thanks for that. Any update you have would be be great!
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We have now spoken to HMRC and had confirmation that the new rules do not apply to PDF patterns, printables or graphics sold through Folksy and supplied to a customer by attaching a PDF or file to a bespoke email.
However, if a digital service is delivered to a customer by automatic download from another site (your own website, for example), even if the purchase was made through Folksy, the new legislation does apply and you will need to register for the VAT MOSS scheme.
I also asked the HMRC yesterday whether this interpretation applies to all EU Members, and they said that as all Member States, including the UK, are basing their interpretation of what constitutes a ‘digital service’ on a single unanimously agreed piece of EU legislation, they do not expect their interpretation to be contentious and challenged.
So it would seem that PDFs sold through Folksy and manually emailed to a customer with an individual message are not defined as a digital service and so they are not covered by the new legislation. Which means only a tiny number of Folksy sellers will be affected by the changes. I’m drafting a blog post with the update now.
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@Folksycontent
Thank you for this post. I can only imagine the angst this issue has caused you and Folksy.
I do not understand, however how they can claim that all countries within the EU will follow this guideline when it well documented that many (actually most) will not accept this definition.
If I sold downloadable items (which I do not) I would still be registering for VAT MOSS. Yes, it is a pain to have to file 4 x a year BUT at least I would know that I meet this legislation when they start rigorously enforcing this EU wide which I am pretty sure they will in the not too distant future. You DO NOT want HMRC angry with you! Take my word on that LOL
Thank you @sianfolksy It’s good to know other EU countries are joining the UK with the non instant download, ie emailing a pdf file attached to a manually generated email.
I’ve not yet sold any of my pattern to EU countries only to English speaking Non EU countries and mine have never been instant download.
I am wondering what will happen when this comes in force for phsycial goods sold over the internet in 2016.
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I’m still a bit confused. From looking at the HMRC’s flow chart, I would consider Folksy as a third party platform or marketplace, which then would do VAT for me? I have only had one digital sale on Etsy so far and that was to the USA in December. I wouldn’t mind registering for VATMOSS, but my sales would not even match he £30/year to register as a data controller to keep customer data details, that’s what is keeping me back a little!?!
Yes, but Folksy does not currently offer the instant download service for digital items that the other site does. For the majority of EU countries, attaching a pdf to an email and sending that to your customer is considered adequate manual intervention.
There are other sites that do offer a digital download service AND who will handle the VAT for sellers. It’s generally good not to have all your eggs in one basket anyway 
Other sites? I didn’t know. Hmm, good idea to spread out and have a few sites with patterns on. Anyone offer any suggestions of other digital download sites in the UK for crafts etc?
Yes, in one of my previous posts above I mention one that I am using, Payhip.