Supplying photo by direct download (UK)

Comments

14 comments

  • Martin Wilson

    It is not just UK - it applies to anyone supplying direct downloads into the EU. By 2016 it will include tangible products such as books and prints. UK HMRC and otherEU tax authorities have assumed service platforms like Photoshelter, or PayPal, will collect the necessary evidence and apply the correct tax for the buyers location at time of sale, not their home but some version of current location (ill efined like most iof the rules).

    Will PhotoShelter be meeting that requirement? Alternatively can PS ensure that EU sales are business to business or are not made to EU customers; amnd proive it? If it can't I suspect most European customers will have to think very hard whether they can continue to use the PhotoShelter ecommerce service. I am very close to removing automatic download from my site in which case I willhave no need for PhotoShelters service, shame but that is how it is.

    1
    Comment actions Permalink
  • Tom Parkes

    Thanks for bringing this up. The document specifically states B2C - can we be confident they mean that, that is, B2B is not caught up in this?

    0
    Comment actions Permalink
  • Peter Noyce

    Yes it says B2C but if you're offering auto download how do you check it's B2B (no tax) rather than B2C (tax) - and if the client misrepresents their status who pays if it gets pulled up. Does PS offer various tax rates according to country? (I don't do auto download so it's not a problem I've come across.

    0
    Comment actions Permalink
  • Martin Wilson

    It appears B2B is not caught up but one would probably have to be able to prove that the customer is a business. The only way I can think of is to require, and check, a buyers VAT number at point of sale or registration as a customer. It would exclude many small business (for example VAT Number and collection is not required in UK if turnover is below £81K (~$140K).
    This “scheme” will be extended by 2016 to tangible products ordered online (I don’t know how automatic it has to be) so prints and books will be caught.

    The EU and HMRC in the UK seem to be expecting the platforms PayPal etc to do the data capture and pricing and provide it to the photographer (in our case). One of the platforms (Bandbox or such like – I haven’t been able to find the reference) proividing a similar service for independent musicians have recently announced that they will doing the data collection, applying tax rates to be compliant and providing the band or musician (who charges the customer directly) with the report so that they can fill in the quarterly tax returns and pay the tax.

    As things stand I cannot permit automatic downloads – 1 EU sale after 1/1/2015 and I am trapped by a disproportionate administrative burden and cost. So your response will determine whether I continue to use PhotoShelter – I do not need it for storage or backup, just ecommerce and so far that has not been cost effective. I was going to give it a few more months now as I had relaunched my busisness.

    0
    Comment actions Permalink
  • Tom Parkes

    Thanks Martin. Remember, Photoshelter will not respond to a question asked here.

    1
    Comment actions Permalink
  • Martin Wilson

    I have sent a question to support with regard to this.

    0
    Comment actions Permalink
  • Tom Parkes

    Out of curiosity, why did someone find it necessary to vote my comment down? Incidentally, Martin's post preceding mine was not visible to me when I added mine. Might want to look into that.

    0
    Comment actions Permalink
  • Martin Wilson

    I have had one reply from PS telling me how to set up tax rates by country. I don't think they understand the problem as they ignored all my questions about the location information, how to prove the client is a business and all the other compliance data that needs to be collected.
    After Christmas and before 1 January I expect I will have to close my account – I first need to work out how to download all my images (I have them backed up but this just to be sure). Any tips anyone especially with regard to marinating the directory structure?
    I will make more money by saving the $30 a month than I will lose in sales. Shame as I was going to try and ramp my online business in the New Year - don't have the energy or the will to go back to dealing with VAT again especially as an unpaid tax collector for 28 countries all of who can, and will, penalise me if I get anything wrong or I am late reporting. Although I have some skills in building web sites I do not have the skills to set up the complex (and unclear) processes I need for these new rules.
    The other big question is how I will report on time when I need to be on the road taking photographs rather than sat at a desk is another big issue. I certainly can't pay anyone to do it - I am already below the minimum wage. My photographic portfolio was going to be my pension fund. I could go on benefits I suppose.

    0
    Comment actions Permalink
  • Tom Parkes

    I have my accountant looking at this. If there's anything I can share with a general audience I'll add it here. I was rather hoping this topic would be a candidate for the new Photoshelter public address system?

    0
    Comment actions Permalink
  • Martin Wilson

    I spoke to my accountant and his suggestion was to just sell to vat registered B2B but proving that is difficult enough especially in real time. I don't see PS doing it but I have asked the question. Anyway the portal for validating vat numbers (VIES) is not available for 24x7 for all EU countries. To get proper confirmation you need to be registered yourself - then you get a "consultation reference" which you have to keep.

    I don't see how a one man band (or indeed even bigger business) can ever actually comply. Certainly no one can know whether they are compliant with 28 different interpretations of the rules. UK HMRC are their usual vague self as to what constitutes digital supply.

    I really think they have killed small online businesses. You can't even reliably exclude EU customers or only supply to UK (or US, or ...). With the Internet there are no meaningful national boundaries but our politicians are still trying to apply 19th century commercial and taxation rules. The simply don't get it; the world had changed!

    0
    Comment actions Permalink
  • Peter Noyce

    Thanks for sharing that Martin. It seems to me the only way is to put a statement on the site to the effect that by purchasing the image the buyer is declaring that they are VAT registered in their country and indemnify the supplier should any tax subsequently become due.

    0
    Comment actions Permalink
  • Martin Wilson

    Wouldn't work Peter. The rules make the supplier liable in each and every country. You have to be spend more money thana the tax collecting it, and then the tax authority will do the same. It will be a huge waste of resource. The "civil" servants and politicians don't care they get their salary and their gold plated pensions anyway.

    0
    Comment actions Permalink
  • Iain McGillivray

    I wonder how much lobbying was done by major IP creators to get this enacted. They will already have the accounting processes in place to deal with this but it will create a lot of complexity and bureaucracy for small businesses that only have a few sales of this type. Many of us (in the EU) are already having to deal with US withholding tax paperwork.

    You would think with the economy the way it is the governments would do all they can to help small businesses. On the other hand perhaps they want us all to end up working for corporates who can afford to take MPs out for lunch on a regular basis.

    0
    Comment actions Permalink
  • Iain McGillivray

    I've been looking over this issue this evening and the conclusion I have come to is to have people contact you with the image page link and then you send them a quote/invoice manually through the Instant Sale feature in the Admin Area. Either that or provide them with a download URL and invoice by email.

    Many RM buyers will want to negotiate licence rates anyway so I don't see it being a huge problem for many buyers.

    0
    Comment actions Permalink

Please sign in to leave a comment.