I’ve been contacted by Heather Burns, one of the people campaigning against the new EU VAT rules on digital services, about the response to the new laws from Patreon. As you may recall, crowdfunding and patronage were two of the relatively new funding sources that the EU and Treasury mandarins completely failed to consider when bringing in the new legislation. As Heather reports, Patreon has decided to ignore the whole thing.
Of course Patreon has no obligation here. They are a US-based organization and they don’t have to collect taxes on behalf of the EU if they don’t want to. Their legal justification for not complying appears to be utter hogwash, but that isn’t really important. What is important is that anyone resident in the EU that wishes to use Patreon is now obliged to register for VAT and do all of the admin themselves. This is very different from, for example, Amazon, who do all of the work for you.
My guess is that many other non-EU platforms will follow Patreon’s lead, which rather makes a mockery of HMRC telling people that it is the platform’s duty to provide the necessary accounting services.