So Much For Voting, Then…

With a General Election due up in May of next year it seemed likely that the current UK government would follow the example of parts of the USA and try to prevent people who might disapprove of it from voting. They are starting small, on a group of people unlikely to get much sympathy from the media: trans folk.

As this Gay Star News article explains, registering to vote in the UK now involves either sending off a huge amount of paperwork, or using an online form that demands you reveal if you have ever changed your name. This is in direct contravention of the Gender Recognition Act, and is probably a violation of EU Human Rights legislation as well. I think I’m OK, in that I am already registered, so I shouldn’t be asked to go through the process again unless I move home. Other people won’t be so lucky.

I changed my name 20 years ago, and have had passports and a driving license issued in the new name. I even have a birth certificate in my new name. But apparently there is still doubt about my identity that can only be resolved by outing myself to whichever people happen to be responsible for the register of voters. Oh well, at least the form doesn’t ask for my “real name”.

Posted in Current Affairs, Gender | 2 Comments

Wonder Woman at the Merril

I have been lucky enough to be in Toronto when they had an author event on at the Merril Collection. This was Jill Lepore on tour with her new book, The Secret History of Wonder Woman. Naturally I went along. The event was packed, though aside from a few Merril staff there was no one I recognized. Lepore, it turns out, is an excellent speaker, and I’m sure I am going to enjoy reading her book. I should note that she is an historian, not a comics expert, and her main interest is in the life of William Marston, the man who created Wonder Woman. But he did have a very interesting life, and his work has a prominent place in the history of feminism.

Most of what Lepore had to say was about the early 20th Century. Marston died in 1947. However, Lepore did talk a bit about the late 60s and early 70s when Wonder Woman was adopted as an icon by parts the feminist movement of the time. This was of particular interest to me because I had been looking at what was happening in the comic at the time — specifically the horrendously homophobic #185. That issue makes much more sense when you know that Diana was being used by prominent feminists to promote their cause.

Nothing changes, of course. That issue of Wonder Woman was a key part of the talk on LGBT superheroes that I was giving last year. Another key element was the character of Alysia Yeoh, Barbara Gordon’s trans woman friend. Gail Simone deftly had Babs and Alysia sharing a house together before revealing that Alysia was trans, and then showed clearly that this was not an issue in any way. Gail has since left, and only a few issues later the new (all male) creative team has made a point of establishing that Barbara is horrified by trans people. I am so unsurprised.

Update: I see that Cameron Stewart has posted an apology about that Batgirl issue, which is progress. Also my apologies to Babs Tarr whose name didn’t come up when I looked up the creative team online. Thanks to @ariadnesisland for the tip-off.

Posted in Books, Comics, Feminism | 2 Comments

Doom, Gloom and #VATMOSS

While I’m busy with my day job in Canada, Juliet McKenna and her colleagues are beating their heads against the brick wall that is Whitehall. Juliet’s latest post is here, and in it she explains how HRMC found a solution for her problems. It involved sacking her existing publisher, who was clearly incompetent, and instead signing up with one of those outfits that will charge you £500 to make an ebook (which they probably do by automated conversion). I guess if you are making that amount of money off the gullible then you can afford all of the administrative nightmare that is VATMOSS.

The trouble, as Juliet makes clear, is that the people she is dealing with don’t have a clue. Not do they seem to think it is at all important.

If Wizard’s Tower were my means of making a living then I’d be a lot more sanguine about the whole thing, though if my net income from it was around £12k/yr (which is approximately what I earn from the day job) then the addition of at least £1k/year in dealing with VATMOSS would not be very welcome.

Our beloved government, however, thinks that a small business is one with 200 employees and an annual turnover of £30m. Single-person businesses, of which there are around 4.6 million in the UK, are barely on their radar. Many of those single businesses will have difficulty surviving VATMOSS.

However, the businesses that will really suffer and the countless (literally, as we have no idea how many there are, because no one has bothered to count them) businesses like Wizard’s Tower that don’t make enough money to support even one person full time. The annual turnover of Wizard’s Tower in my last annual accounts was around £5k, and the business made a loss that year because it bore most of the costs of Airship Shape & Bristol Fashion while enjoying little of the revenue from it. Add £1k of admin costs to that and you are in serious trouble.

The nice gentlemen in Whitehall don’t seem to think that this is a serious business. If you can’t even provide the livelihood for one employee, what right do you have to call yourself a business? Who cares if you go to the wall? From my point of view it would not matter than much, because I have such slim profit margins (thanks, Amazon, for competing with me). Other digital businesses might bring in their owners a few thousand a year. What does that pay for? It might mean the difference between being able to afford a holiday or not; it might mean nice Christmas presents for the grandchildren that you couldn’t afford on a state pension; it might mean not having to go on benefits because your job at Tesco doesn’t pay enough to cover the rent and feed the kids. Naturally all of this seems like something out of a Dickens novel to someone on a fat civil service salary. They don’t believe that it happens.

And then there’s the other thing. Most of the people involved in this campaign are women. Most of the people we are dealing with are not. We know that their understanding of ecommerce is woefully lacking. We haven’t even tried explaining the crowdfunding issue to them, because it would be like telling them we were cloning dodos for all they would believe such a thing were possible. But from their point of view it is a clear case of the little ladies not understanding technology, and if only they would stop nattering for a while and listen while someone mansplained the Internet to them, why then their problems would all go away.

Head. Desk. Repeat.

Posted in Current Affairs, Wizard's Tower | 13 Comments

And That’s How To Do Snow

It stopped snowing here last night. Temperatures overnight were below freezing, and stayed that way into the early morning when I had to get to the venue for the training course I am giving. I was expecting a nightmare of packed snow and black ice. Instead I found all of the sidewalks neatly cleared and gritted. Well done, Toronto. I’m impressed.

Having spent most of the day doing training, I am officially exhausted. How school teachers cope I do not know. I don’t even have the energy to read (and of course the TV is crap because it is Friday night). I may just go to bed. After all, it is 1:00am UK time.

Posted in Weather, Where's Cheryl? | Leave a comment

Meanwhile, In Toronto

I am here. I won’t be online much, partly because I am busy, and partly because the roaming charges are horrendous. I have put my phone in airplane mode so that the apps on it can’t rack up massive bills without me doing anything.

There is snow. Lots of it. It started late last night and continued through most of today. Right now it is quite pretty. Tomorrow it will be EVIL. I hope they grit better than London.

I have dropped off a few copies of Airship Shape & Bristol Fashion at Bakka Phoenix books, so if you are in Toronto and would like a copy please do drop by before they sell out. I have come away with a bunch of new books by other people, including The Three Body Problem, which I am very much looking forward to.

This evening I am off to the Merril Collection to see Jill Lepore talk about her book, The Secret History of Wonder Woman.

I may get a cab.

Posted in Books, Comics, Weather, Where's Cheryl? | Leave a comment

Me at Tor

I should be in the air by now, but according to the good folks at Tor something I wrote will be going live on the Tor UK and blogs around now. When I arrive in Toronto I am expected a welcoming party of gray caps with spore guns and fungal bombs trying to kill me.

Posted in Weird, Writing | Leave a comment

Lawyers Gone Crazy

I was checking Twitter on my way to Heathrow today when I stumbled upon the latest piece of excitement to hit my author friends. Apparently some large publishers are now demanding “non-compete” clauses in book contracts. Yes, that’s right, if you want to sign with them you have to agree not to write for anyone else in the meantime, not even under another name.

As far as I know, this doesn’t apply to individual short stories (the figure of under 35k was quoted), or to backlists, but I can imagine it applying to a collection of short fiction. So, for example, if Juliet or Lyda were to sell a new novel to a major publisher, they’d be told that they couldn’t put out a collection of short fiction with me. Even if it was in another universe. Even if the major publisher didn’t want to publish it.

The phrase “anti-competitive” may have flitted through my mind.

I’m sure this is nothing to do with the editors at the big publishing houses. They are sensible people who are doubtless just as outraged about this as their authors are. It is the corporate lawyers at the multi-national media companies who won those publishers trying it on. And if they get away with this they will doubtless want to claim ownership of all of the creative content next.

Oh well, it gives SFWA something constructive to do. As a publisher, I’m officially the enemy, but in this case I think they’ll be fighting on my side.

Posted in Publishing, Wizard's Tower | Leave a comment

Travel Warning

Tomorrow, if all goes well, I’ll be flying to Toronto. It is a business trip, and very much a flying visit. I’ll be in meetings much of Thursday-Saturday, and I’m flying back Sunday night. I will have a bit of free time, but not much. Part of that time needs to be spent visiting Bakka Phoenix Books, where amongst other things I will be dropping off some copies of Airship Shape & Bristol Fashion.

However, I won’t be entirely absent from the Internet while I am traveling, because if all goes according to plan I will have an article up on the Tor UK and websites. Apologies in advance that I won’t have much time to respond to any comments.

Posted in Where's Cheryl? | Leave a comment

Le Guin Loves Finland

Today’s tweet stream wasn’t all rage-inducing. There were some very nice things too. Top of the list was this blog post by Ursula K. Le Guin in which she praises her Finnish publisher for getting the appearance of characters right on a book cover. Of course we all know that the Finns are wonderful, but it is lovely to have Ms. Le Guin on board too.

Do you need any more reasons to vote for Helsinki in 2017?

Posted in Books, Conventions, Finland | Leave a comment

Less of the Freak Show, Please

It is fairly rare that I get absolutely furious with someone on Twitter, but if I do it is almost always with the LGBT History Month account (@LGBTHM). They have a poor track record of insensitive posts about trans people. Today’s tweet was a classic:

Stunning Before And After Photos Depict The Journey Of Gender Confirmation Surgery

I don’t know what that says to you, but to me it screams loud and clear, “FREAK SHOW! COME AND GAWP!!!”

There was a link in that tweet to an article in the Huffington Post. This one. It is the sort of coverage of trans issues that makes me want to beat my head on my desk until it bleeds.

Ostensibly, of course, it is all very sensitive. The article talks about “respect”, “ambition” and “empowerment”. Practically it is all about click bait, and the aforementioned freak show.

It is entirely plausible, of course, that the people in those photos are proud of what they have done and empowered by it. I know that other trans people are very comfortable with “before” photos being displayed (and see the footnote about genderfluid people). But I tend to view such material with some suspicion when it is framed using a narrative written by the person making the pictures rather than the trans people themselves.

For example, think back to My Transsexual Summer. Most people agree that the series did great things for the trans community. It was certainly far less exploitative than most television about trans people. But the series was by no means a bed of roses for the stars. Check out this interview with Fox, in which he explains some of the awful things that were done to him by the production crew.

The people photographed for that HuffPo article are all from Cuba, which is not the most affluent place in the world. My first question on seeing the article was to ask how many of them posed for those pictures willingly, and how many did it because they were being offered a lot of money to do so.

Even if some people are willing to pose for such photos, however, it doesn’t mean that making them, and posting them in that way, is a sensible thing to do. The “before and after” photo is a staple of tabloid coverage of trans issues. They do that because of the freak show aspect of it, and also because it panders to transphobes by giving them an image of what the trans person “really” looks like. The “after” photo is seen, if not always presented, as a picture of a person in disguise.

Huffington Post knows this, and for all their weasel words about respect and empowerment, the headline makes it very clear that this is a freak show article.

Much of this comes back to issues I covered in the article I wrote for Holdfast recently. Cis people are fascinated by the transformation aspect of trans people. If they write about us, if they make films or photos of us, what they want to show is the change. That’s not treating us as people, it is treating us as objects for their entertainment. There’s far more to trans people than that, but who cares, right? The fact that we are ordinary people is not news, the fact that we can be presented as freaks is.

In any case, many trans people are deeply traumatised by images of themselves pre-transition. That’s what Gender Dysphoria means: you are distressed by your body. I understand that some people might be proud of their transition, but those people need to be aware that by encouraging “before and after” photos they are putting pressure on everyone else to do the same thing. The very first things most journalists ask for when doing a trans article are your “real” name and a photo of what you “really” look like. Except of course they’ll say your “former” name and a “before” photo, so it doesn’t sound quite as exploitative.

Don’t encourage them, please.

Even if all is well with that article, however, and all of the people pictured are delighted with what was done, nothing excuses the headline. “Stunning Before And After Photos”? That’s pure, exploitative click bait. That much at least should be obvious to anyone.

On Twitter, of course, we are limited to 140 characters. There may be a link as part of that, but by no means everyone who reads your tweet will click through. On Twitter, therefore, we have to be very careful about repeating click bait headlines. If you are going to link to a problematic article, using that article’s exceedingly problematic headline as your tweet is not wise.

Footnote: someone is going to read this as say that it is deeply offensive to genderfluid people. That’s not the intention. If an important part of your identity is your ability to manifest more than one type of gendered appearance, by all means go for it. But that HuffPo article was very specifically about people who had undergone gender confirmation surgery. I did consider using “transsexual” in place of “trans” to make this clear, but it’s not a very good word and I try to avoid it these days.

Posted in Gender, Journalism | Leave a comment

Some #VATMOSS Updates

First the good news. I have email from HMRC assuring me that I do not have to register for VAT provided that I sell exclusively through third party sites that collect VAT on my behalf. This means Amazon, Google Play, and probably a few others that I haven’t confirmed that yet.

What that also means is that I can’t sell direct, I can’t sell through non-compliant third party stores (such as Weightless), and I can’t use crowdfunding.

Us book publishers get off lightly. In other business areas the main sales platforms are non-compliant. I’m thinking in particular of Etsy (for crafters) and Bandcamp (for musicians).

And now the bad news. The petition has got past 10,000 signatures, which means that the government has had to make an official response. Sadly whichever policy wonk wrote this for Vince Cable is hopelessly out of the loop.

Essentially what the Cable response is doing is regurgitating the old HMRC line that we were getting a couple of weeks ago. As this blog post explains, that was based on consideration of what the government described as an SME (Small to Medium Enterprise). The official definition of this is, “the category of micro, small and medium-sized enterprises (SMEs) is made up of enterprises which employ fewer than 250 persons and which have an annual turnover not exceeding 50 million euro, and/or an annual balance sheet total not exceeding 43 million euro”.

As you can imagine, most of the businesses in trouble over VATMOSS don’t make anywhere near that. Typically they are sole traderships (1 employee) and have turnovers not exceeding 50 thousand euro.

There are apparently 4.6 million such businesses in the UK at the moment, and while not all of them will sell digital products that’s still a huge number of businesses affected. A lot more than the 34,000 that HMRC estimated.

Anyway, I have to go on a business trip shortly, so I am leaving all of this in the capable hands of Juliet, and now also of Talis Kimberley, whom many of you will know from her music (yes, she is affected), but who is also now the Green Party’s Prospective Parliamentary Candidate for South Swindon. With any luck, by the time I get back they will have knocked a few heads together.

Posted in Current Affairs, Wizard's Tower | Leave a comment

Launching the Nunslinger

Today I headed into Bristol for a launch event at Forbidden Planet. It was for Nunsligner by Stark Holborn. Stark is a pen name of a local writer, and Nunslinger is a rather unusual book. To start with it is a Western. Also it is written as a collection of 12 longish short stories, with an overarching story arc. Westerns about nuns are by no means unknown, but Stark thinks this might be the first one in which the nun is actually serious about her faith, as opposed to it being something that gets abandoned very quickly under the pressure of life in the Wild West. I understand that the individual stories were released as ebooks as Stark was writing them. That’s an interesting pressure to put yourself under.

I haven’t had time to read the book yet, but judging from the extract we heard at the launch I am expecting it to be very good. Stark will be reading at BristolCon Fringe in February and as long as the date doesn’t clash with my having to be in Manchester for LGBT History Month I’ll be there and hope to podcast it.

While I was in store I picked up the latest Bryan Talbot graphic novel, Grandville Noel. I read most of it on the train home and finished it quickly thereafter. Bryan is on fine form, and the book contains some interesting information on the history of the Grandville world. Highly recommended.

Posted in Books, Comics, Readings | Leave a comment

What Exactly Constitutes a Terrorist Threat?

Those of you who follow me on Twitter may have seen me taking a renewed interest in the case of Monica Jones. She’s an American trans activist whose case I wrote about back in April. Recently Monica flew to Australia to do some research on AIDS as part of a college course she has been doing. As this Advocate article reveals, she was stopped at Sydney airport and deported because her name was on a no-fly list as someone as someone who might be considered a “possible threat” to Australia. Gosh, is she a terrorist? Well, I guess that depends…

You see, Monica is in trouble with the law back home in Arizona. She has been found guilty of “manifesting prostitution”, which basically means that a police officer saw her in the street and decided that she was soliciting. No other evidence than that is required for conviction. In other words, Monica was found guilty of walking while black and female. And for this she was put on a no-fly list and barred from entering Australia.

Oh, and she’ll fail her college course because she was unable to complete the research.

Just what are you afraid of, Australia?

Ah well, at least she didn’t have a Hugo in her luggage. And I’m not even going to start on the whole saga of a TV crew being tipped off about her being stopped and Aussie immigration then using that as part of their excuse for deporting her.

The point is that these days we are living in a “Your Papers, Please” society, and the less privilege you have, the more likely it is that you will suddenly find that your papers are not in order and you no longer have any rights.

Posted in Australia, Current Affairs, Gender | Leave a comment

North by Southwest – Final Week

My pals at the North Bristol Writers Group are into the final week of their crowdfunding campaign for the North by Southwest anthology. They need less than £200 to get fully funded, so do please consider backing the campaign. There will be stories by Roz Clarke, Kevlin Henney, Ian Milllsted, Pete Sutton, Justin Newland and Desiree Fischer, all of whom you may have heard on BristolCon Fringe podcasts. There will be art by Claire Hutt. And in particular there will be a new steam-powered programmable war elephants story by John Hawkes-Reed.

The ebook is only a fiver, and remember, after January 1st it won’t be possible for EU-based companies to use crowdfunding with digital rewards because of the cost of VAT compliance. Get this while you can.

Posted in Books | Leave a comment

Hola Hispacon

Spain’s annual SF convention is taking place in Barcelona this weekend. The Guests of Honor are: Christopher Priest, Ian Watson, Aliette de Bodard, Nina Allan, Karin Tidbeck, Félix J. Palma. I’ll be interested to hear reports of it, as I’m hoping to be at the Eurocon in Barcelona in 2016. More immediately, however, I would love to be on one programme item. It is about Alucinadas, the first ever women-only science fiction anthology in Spanish. Many of the contributors come from Latin America, including Angélica Gorodischer. You can read more about the project (in English) on the very fine Sense of Wonder blog. There is also a brief note (in Spanish) on Amazing Stories. (And kudos to Steve for having a whole Spanish language section these days.)

Posted in Conventions, Feminism, Science Fiction | 1 Comment

A Brief #VATMOSS Update

Thanks to the fine folks at Enterprise Nation, Juliet McKenna was one of many concerned people who got to meet a bunch of HMRC and Treasury bods in Westminster yesterday. As you’ll see from this report, Wizard’s Tower got mentioned. That also led to our getting a mention in the Financial Times today. It is behind a pay wall and they got their facts wrong, but hey, my little publishing company got mentioned in the FT.

It is a little early yet to know exactly what will come of this, but from what Juliet has told me we have at least been listened to, rather than getting fobbed off with platitudes as has been the case before. Also the government now has a much better idea of the scale of the problem.

While the possibility of getting the UK government onside is encouraging, these regulations are EU-wide, and we won’t be able to fix the problem without taking the campaign to Brussels. I have spent part of today emailing friends in Europe trying to find out how other countries are tacking the issue. If you happen to know anything about the situation in other EU countries, please get in touch.

Posted in Current Affairs, Wizard's Tower | Leave a comment

Crowdfunding and the #VATMOSS Mess

Some of you are doubtless sick of all this VAT stuff by now, but it is consuming my life at the moment so I have nothing much else to write about. Sorry.

The current view is that a small press will probably be OK, and an individual writer will definitely be OK, if they stick to selling through VAT-compliant marketplaces. We think Amazon will be deemed compliant. So far so good. We don’t have to register for VATMOSS, as long as we close any direct sales outlets and stop selling through non-compliant stores. But what if the press wishes to raise money in some other way, such as a project on Kickstarter, or via Patreon?

This is where things start to get very murky, because it isn’t clear that anyone at HMRC knew what crowdfunding and patronage were before we started telling them. They certainly don’t seem to have appreciated how important these things are becoming.

With regard to crowdfunding, there is a lot of hot air blown over the subject of whether rewards count as “sales” or not. People go through all sorts of verbal gymnastics trying to prove that rewards are an investment in the company, or a donation, or some other thing that is not taxable. None of the accounting advice I have seen has any truck with this sort of thing. (See here, for example, or Suw Charman-Anderson writing for Forbes). Kickstarter even explicitly warns users that some rewards will be subject to VAT.

However, crowdfunding platforms do not view themselves as marketplaces. Even the UK-based ones I have looked at explicitly state that they exist only as a means to help users run campaigns. They do not collect VAT for you.

Now HMRC says that it is the responsibility of the marketplace to undertake VAT collection, so what they are going to make of this remains to be seen. Until something happens, however, it seems pretty likely that anyone in the EU offering digital goods as rewards in a crowdfunding campaign will be selling services directly to the customer and must register for VATMOSS, with all of the vast burdens that entails.

Patreon is rather different, in that you are generally not explicitly paying for something. For example, I can listen to Galactic Suburbia whether I back them on Patreon or not. And the various rewards on offer, in the form of more and better podcasts, are also available to everyone, regardless of patronage. (Update: at the highest backer level there’s an actual gift, but it is a paper fanzine so that’s goods not services.) So, could I put the Salon Futura podcasts up on Patreon and get money that way?

Sadly, I don’t think so. You see, podcasts are digital services, and thus if I get money for them they are liable for VAT. There are some tax rules about being allowed to receive small gifts tax free (up to £2500 a year), but those appear to apply only to charities, not businesses. HMRC would class the money received as a benefit, and benefits are taxable. I would certainly pay income tax on Patreon money if I got any.

The annoying thing is that none of this would matter if ebooks were classed as goods, or if there were a VAT threshold for cross-border digital services sales the way there is for cross-border sales of goods. As I explained yesterday, I can’t see any way that HMRC and the EU will change the classification of digital products, because the large media companies want them classifies as services. But I have yet to hear any sort of rational explanation as to why the thresholds are zero. If all EU countries have high thresholds for cross-border goods trade, why can they not do so for digital services? Why is there this specific attack on the digital economy?

Posted in Current Affairs, Wizard's Tower | 1 Comment

Why #VATMOSS is a #DRM Issue

Another day, another set of confusing and contradictory messages about what will and will not be allowed from January 1st. There is, for example, this article in the Telegraph, which claims a victory for campaigners but is actually nothing but HMRC spin, presumably fed to the Telegraph by them. Firstly, any solution that requires micro businesses to register for VAT is a disaster. Only having to do so for sales into the rest of the EU is no help. Also, when we had the Twitter seminar on Monday, HMRC insisted that, in order to split reporting in the way that the Telegraph article suggests, the two parts of the company would have to be legally separate entities. You can’t do that if you are a sole trader, so at least one part of the company would have to be separately registered as a company. Yet more expensive red tape that people won’t have the time to deal with before January 1st.

What I want to talk about here, however, is a fundamental question that lies at the heart of the whole debate: whether digital products are “goods” or “services”. It is important because the EU has very generous revenue thresholds for selling “goods”, below which registration for VAT is not necessary. In contrast the revenue thresholds for selling “services” are zero, so everyone who sells them has to register.

At first sight it would seem crazy to suggest that an ebook, and MP3 of a song, or a jpeg of a photo, is a “service”. The physical products are very clearly goods. How does digitizing the product transform something from a “good” to a “service”? HMRC is getting itself tied in knots trying to establish how an ebook becomes a “service”. If you put it on a CD and mail it then is definitely isn’t a “service”. If you manually attach it to an email and send it then it may or may not be (HMRC people seemingly can’t agree amongst themselves on that one). But if you download it from a website then it is definitely a “service”.

Then again, for some time now, large corporations have been intent on establishing that digital products are indeed “services”. That’s because they are desperate to move us from a world in which we are able to own products — books, record, and so on — to a world in which we only ever rent a license to use products. They have been moving us from buying “goods” to buying “services”.

The way in which publishing companies distinguish between a “good” and a “service” is party with DRM (and partly by the terms and conditions under which the product is sold). By applying DRM to a book a publisher is saying, “this is not something you own and can copy or give away, it is something we own, and are renting to you”.

That’s not the way I publish my books. When I sell you a book I am still selling you a product. When you buy that file from me, you own it (though you don’t own the creative content as that’s covered by copyright). I am by no means the only publisher to operate in this way.

Logically, DRM free books ought to be goods. But can you imagine the chaos it would cause if a book with DRM was subject to VAT, but a DRM-free book was not? Not only would the DRM-free book be better value, but it would be cheaper too. It would be political dynamite for any country to make that distinction. So instead they have settled for the simple option of classing all ebooks as “services”. And now that they want to apply Place of Supply rules to VAT charged for those “services” they have got themselves into this ridiculous mess.

It is possible that this is a way out for me, in that I can argue a case whereby my books don’t become “services” until they are sold to the consumer. Therefore, if I only sell through VAT-compliant marketplaces such as Amazon, I don’t have to register for VAT. But I have no idea whether HMRC will accept such an argument, nor do I have any faith in their willingness to even consider the question. And without any assurance that I’m operating legally, I’ll need to take steps to move the business outside of that law.

Furthermore, there are all sorts of good reasons why digital microbusinesses might not want to sell solely through Amazon and its ilk. They might have products that such platforms aren’t set up to sell. They might not want huge corporations to have control over what they sell and how they sell it. In practice what HMRC is doing is the equivalent of saying to a small farmer that she can’t sell her crops at a market stall, she has to sell them through Tesco or a similar supermarket. What we need is a revenue threshold below which microbusinesses don’t have to register for VAT, regardless of what they are selling. Anything less (Telegraph please note) is a defeat.

Posted in Current Affairs, Wizard's Tower | 3 Comments

Join the #VATMOSS Fightback

I have updated yesterday’s post to explain the Byzantine reasoning why digital products are apparently not eligible for the VAT thresholds. In the meantime, Juliet has set up a protest group to try to force HMRC to take notice of the very many businesses that it will destroy. If you are affected in any way by VATMOSS, please sign up here.

There are also some guidelines as to how to best go about writing to your MP or MEP about this. This will affect all of you in the UK, because one of the effects of this will be that Amazon has to charge 20% VAT on ebooks rather than 3%. They’ll try to do that by squeezing authors and publishers, which will hurt your favorite writers, but inevitably prices will rise too. If small presses were allowed to claim VAT exemption we’d be allowed to sell you ebooks VAT-free. Having no exemption threshold means that we can’t do that.

Posted in Current Affairs, Wizard's Tower | 2 Comments

The #VATMOSS Mess Enters Looking Glass Land

The biggest problem that all of us struggling with this issue have is that we simply can’t rely on information we are given. I’ve mostly given up researching it and am instead looking at the issues involved in selling Wizard’s Tower to someone outside of the EU. Juliet McKenna, however, has been beavering away. And the more she finds out the more like Looking Glass Land the whole thing becomes. Take this, for example:

Yes, that’s right. On the one had we are being told that we should prevent people in other EU countries from buying our products if we can’t charge the correct VAT rate, and on the other hand we are being told that such discrimination may be illegal.

Meanwhile folks in other countries are getting worried about having to register. Here’s Howard Tayler:

So, no Shlock Mercenary for you, EU readers. And HMRC is quite adamant that non-EU suppliers MUST register, no matter how small their business.

Does that seem crazy to you? Well actually it is. No sane European government would do that. It just isn’t practical for a government to worry about collecting VAT on the sale of 40 knitting patterns a year, let alone take legal action in Canada to enforce it. So I don’t think that Howard, or anyone else outside the EU, has anything to worry about unless they have an EU-based subsidiary, or they sell huge amounts of product. The obvious proof of this is that non-EU countries have been liable to charge VAT under the Place of Supply rules since 2003. To my knowledge, no non-EU small business owner has been arrested over this.

What’s different now is that the same rules are being applied to EU-based businesses, and that HMRC insists that every business has to register, no matter how small. Their rationale for this is that they cannot control laws in other EU countries. While the UK might have a threshold of £81k turnover, below which a business need not register for VAT, other countries might not be so friendly to small business. I quote from their recent FAQ on the subject:

B2 Why can’t there be a minimum VAT threshold like in UK? #VATMOSS

Within limits, each Member State decides on its own VAT threshold, and we cannot impose our threshold on them. #VATMOSS

And they are right. Hang your heads in shame, Spain and Sweden, both of whom have zero thresholds.

But wait, did you click through on that link? Did you read what it said at the top of the page? OK, for those of you who didn’t, here are the important words:

Generally, non-resident businesses that must register for VAT in another EU state face a nil registration threshold. A major exception to this rule is e-commerce to consumers, where foreign EU retailers have special EU distance selling VAT thresholds.

I’ll repeat that. Special EU distance selling VAT thresholds, which apply solely to digital transactions. Here they are. And guess what? None of them are anywhere close to zero. All of them would easily allow a micro-business such as Wizard’s Tower to keep trading.

Now that site I have been linking to is not an official government site. It is, however, very comprehensive and seemingly well informed. For example, just last week they reported that Google would be changing their terms of business to be properly VAT-compliant under the new rules. That’s a big relief.

So what exactly is going on here? It is, of course, entirely possible that HMRC is far better informed than most, and they know that the distance-selling VAT thresholds will be lowered as of January 1st. On the other hand, we could be dealing with a dishonest government seeking to put the squeeze on small businesses and sow distrust of the EU by pretending that EU regulations are much more draconian than they really are.

Update: I see that the page linked to above now notes that thresholds are zero for “electronic services”. Believe it or not, that means all digital sales. As Juliet notes here, that makes a certain amount of sense for a book or movie that has DRM, because you are buying a license to view it, not the object itself. It makes no sense whatsoever if you are simply selling a file. And indeed HMRC says that such things are not “services” if they are manually emailed to the customer rather than directly downloaded. Honestly, it makes quantum physics seem easy.

Just to re-iterate what I said at the beginning of this post, the main issue here is that it is impossible to tell what it is safe to do and what it isn’t safe to do. HMRC will not issue guidance, but they will prosecute if you get it wrong. No one has any idea how governments will cope with tens of thousands of very small companies trying to register to charge VAT, and HMRC seems perfectly happy with the idea that all of those companies will be forced out of business.

Posted in Current Affairs, Wizard's Tower | 4 Comments