"Another way to avoid the rules is to restrict e-goods or services to the UK only and not sell to customers in EU countries."
Which appears to be far easier to say than do, as one of the major problems appears to be collecting the evidence needed to prove the location of the buyer. This either involves technical issues in collecting accurate data, or asking all customers intrusive questions that will put many off buying.
Keep your head down, say nothing and all will be fine is often the most pragmatic answer in the face of daft rules.
That's easy for some people. But a lot of people running nano businesses also have health issues and lack confidence, and ignoring the rules will cause them a lot of worry and stress. It's fine for go-getting entrepreneurial people to take this in their stride, but a single mum, or someone with mental health issues, who's also under pressure from the risk of losing benefits, bringing up kids and trying to keep a roof over their heads doesn't need more stuff to worry about, however slight the chances of getting caught are.
I'm working on a business plan that will provide products and services specifically for the UK market. Some of these will be digital. The content will relate to UK laws, regulations, market conditions, culture etc., and will be of little use to anyone outside the UK, except for general interest. I have no intention or interest in selling outside the UK, but will still get caught up in this, as I will need to check each online sale to ensure that it is not to a non UK EU customer.
I'm currently studying online marketing, and it's very clear that the first step in building a relationship with a customer is to ask for the very minimum of information from them. If I have to ask everyone for additional information to check where they live, just in case they happen to be outside the UK, I will lose a lot of potential business. And I will need to keep this intrusive data that has driven away potential customers for 10 years, in case I need to prove I haven't made an EU sale.
And what if an EU sale does slip through, where I owe 25p in VAT? I either have to send the customer a refund, so they get it for free, but I have to pay bank charges, or I register for UK VAT and MOSS, and have extra admin indefinitely. I'm an accountant and can cope with this if I have to, but it's a complete waste of time and effort, and will cost me and the government far more than anyone receives in benefit from it.
That may only provide a year or so of breathing space
naomi2000 wrote:
If you can't obtain address information or don't want to rely on it , then why not simply apply the suggested solution to all online customers?
That may only provide a year or so of breathing space, as the plan is to extend it to physical products ASAP, maybe in 2016. So sending manually will only be a short term fix. People have got used to buying and downloading immediately, won't be impressed by having to wait, and will probably take future business elsewhere, either to bigger businesses, or small ones who don't know about or ignore this.
Without obtaining satisfactory evidence of the customer's country, how does the supplier know which orders need to be delivered by manual e-mail?
From what I can see, the biggest problem is identifying the sales that are to another EU country, and which one. And also being able to prove that sales within the UK really are internal. Obtaining non-contradictory evidence that the supplier can be certain will be acceptable to HMRC and other EU governments doesn't seem at all straightforward. It appears that IP address and the customer's postal address are the easiest to obtain, but IP address isn't intended for this purpose, and can't be relied on, and customers will be reluctant to give their postal address when there won't be a physical delivery.
My answers
What's next?
Wait until the EU start legislating for social events in beer manufacturing plants!
Restricting e-goods or services to the UK only
"Another way to avoid the rules is to restrict e-goods or services to the UK only and not sell to customers in EU countries."
Which appears to be far easier to say than do, as one of the major problems appears to be collecting the evidence needed to prove the location of the buyer. This either involves technical issues in collecting accurate data, or asking all customers intrusive questions that will put many off buying.
Keep your head down isn't fine for everyone
That's easy for some people. But a lot of people running nano businesses also have health issues and lack confidence, and ignoring the rules will cause them a lot of worry and stress. It's fine for go-getting entrepreneurial people to take this in their stride, but a single mum, or someone with mental health issues, who's also under pressure from the risk of losing benefits, bringing up kids and trying to keep a roof over their heads doesn't need more stuff to worry about, however slight the chances of getting caught are.
It affects UK only sellers too
I'm working on a business plan that will provide products and services specifically for the UK market. Some of these will be digital. The content will relate to UK laws, regulations, market conditions, culture etc., and will be of little use to anyone outside the UK, except for general interest. I have no intention or interest in selling outside the UK, but will still get caught up in this, as I will need to check each online sale to ensure that it is not to a non UK EU customer.
I'm currently studying online marketing, and it's very clear that the first step in building a relationship with a customer is to ask for the very minimum of information from them. If I have to ask everyone for additional information to check where they live, just in case they happen to be outside the UK, I will lose a lot of potential business. And I will need to keep this intrusive data that has driven away potential customers for 10 years, in case I need to prove I haven't made an EU sale.
And what if an EU sale does slip through, where I owe 25p in VAT? I either have to send the customer a refund, so they get it for free, but I have to pay bank charges, or I register for UK VAT and MOSS, and have extra admin indefinitely. I'm an accountant and can cope with this if I have to, but it's a complete waste of time and effort, and will cost me and the government far more than anyone receives in benefit from it.
That may only provide a year or so of breathing space
That may only provide a year or so of breathing space, as the plan is to extend it to physical products ASAP, maybe in 2016. So sending manually will only be a short term fix. People have got used to buying and downloading immediately, won't be impressed by having to wait, and will probably take future business elsewhere, either to bigger businesses, or small ones who don't know about or ignore this.
Without obtaining satisfactory evidence of the customer's country, how does the supplier know which orders need to be delivered by manual e-mail?
From what I can see, the biggest problem is identifying the sales that are to another EU country, and which one. And also being able to prove that sales within the UK really are internal. Obtaining non-contradictory evidence that the supplier can be certain will be acceptable to HMRC and other EU governments doesn't seem at all straightforward. It appears that IP address and the customer's postal address are the easiest to obtain, but IP address isn't intended for this purpose, and can't be relied on, and customers will be reluctant to give their postal address when there won't be a physical delivery.