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Wednesday, December 31, 2014

My shop will remain open, for now

Firstly, Happy New Year to everyone!

I wanted to post an update, and let you know that I've decided to keep my Etsy shop open for the time being. I will continue to check the Etsy forums for news about the new VAT laws. If anything changes, I will have to decide how to proceed, but for now things will remain untouched.

The reason I have decided to keep things the way they are is because everything I have been reading clearly states that Etsy is responsible for collecting the VAT. Individual sellers are NOT responsible. If you would like to read more about it, click on the links below.

The first is a flow chart to determine who is affected by the new law. If you only sell your services through a third party platform or marketplace, then the rule changes don't apply to you.

The second is a guide for businesses supplying digital services. Scroll down to the very bottom and you will see a paragraph entitled "Digital portals, platforms, gateways and marketplaces." It reads:

"If you supply e-services to consumers through an internet portal, gateway or marketplace, you need to determine whether you are making the supply to the consumer or to the platform operator. If the platform operator identifies you as the seller but sets the general terms and conditions, or authorises payment, or handles delivery/download of the digital service, the platform is considered to be supplying the consumer. They are therefore responsible for accounting for the VAT payment that is charged to the consumer."

The third is a Twitter Q&A about EU VAT changes. Scroll down and read the questions and answers in Section C: Sales via third-party platforms. Etsy is even named in Question C3.

Maybe this information will help if you are a seller of digital downloads and are unsure of how to proceed. I still hold out hope that some kind of resolution will be found in the near future.

3 comments:

Marilee Rockley said...

Thanks for finding and posting this information. Your "Ice Dance" snowflake and other patterns are beautiful! I'm glad they're going to remain available.

Margarets designer cards said...

I keep reading so many different things, at present my patterns have been removed until the situation is confirmed. I had am email from esty saying we are responsible for the vat, even though the UK government say esty is. What a mix up.
Thanks for posting this information.
Margaret

Robin Perfetti said...

Wish I could post more about the emails that folks have been sending to HMRC, but Etsy has been deleting them from the forums. Basically, everyone who has sent an email has received the response that the tax authorities will be going after Etsy, and not the individual sellers. Some are reopening their shops after hearing this news.