Gathering MOSS

Remember my SFX 239 column on the joys of creating your own ebooks? Flogging these was a soothing microbusiness, without the hassle of wrapping and posting POD books. Money arrived via PayPal (for example) and books went out as email attachments or website downloads. Sales mightn't be huge, but there was the quiet satisfaction of getting 100% of the profit – rather than the miserable 25% that so many large publishers have decided is an unbelievably generous maximum.

Bad news broke in late 2014, and this simple way of life ended on 1 January. As so often, the problem was Amazon – not directly, but because EU governments hated Amazon's ploy of selling from places like Luxembourg where VAT is low, giving them an edge over registered UK sellers who must charge VAT at 20%. UK microbusinesses weren't bothered because you didn't need to register for VAT until your annual turnover went past £81,000.

Under the new rules, wicked old Amazon must now charge VAT at the applicable rate in the customer's country. As noted, that's 20% here. It's a huge hassle to keep track of VAT rates in dozens of EU jurisdictions, but Amazon's accountants have to deal with it.

Unfortunately, so now do tens or hundreds of thousands of one-person microbusinesses selling digital products like SF/fantasy ebooks, Clanger knitting patterns, Klingon recipes, phone apps to generate Langford columns, and so on. The horrible surprise was that although the standard UK VAT threshold stays at £81,000, the special new threshold for EU sales of such digital "services" is ... zero.

Right. By selling a single 99p ebook online to a non-UK EU buyer, you're automatically plunged into the nightmare of VAT. You need to sign up at the UK MOSS site (Mini One Stop Shop; how cuddly it sounds), apply VAT at the proper rate for each customer's country, and start submitting VAT returns four times a year. It gets worse. You need two non-contradictory confirmations of where each customer lives – PayPal, for example, provides at most one "verified address". You must keep these customer location records for ten years, with tiresome bureaucratic safeguards that dump you into Data Protection Act hell.

It's hardly surprising that after researching the thrills and pitfalls of e-trading under the new "VATMOSS" regime, many SF/fantasy ebook publishers have decided that the best way to deal with the whole ghastly VATMESS is to go out of business. Accountants and lawyers agree this is probably the safest plan.

Alternatives? You can revert to the Dark Ages and make the post office happy by mailing ebooks on CD or floppy disk – because in this Alice-in-Wonderland regulatory world, the identical ebook attracts VAT if it's a website download, but not (unless you're VAT-registered for other reasons) if it's sent by snailmail. You can carry on as before and hope no one notices – but remember the VAT authorities (HM Customs and Revenue) can inflict truly terrifying fines. How about refusing to sell ebooks to non-UK EU customers [which is what I'm currently doing at Ansible Editions]? HMRC doesn't object but warns that expensive EU anti-discrimination lawsuits could follow. Lastly, you can sign up with a big distributor that takes a huge share of your revenue, such as Amazon, and savour the irony of an anti-Amazon regulation that swells the profits of Amazon.

Frustrated by HMRC advice ranging from unhelpful to contradictory, SF authors and publishers took the lead in pushing back. A petition to Vince Cable MP, Secretary of State for Business Innovation and Skill, quickly reached 10,000 signatures and brought the useless response "Don't worry, most people won't be affected." Perhaps he meant "most MPs".

If you sell or hope to sell ebooks or any other kind of digital product online, check for breaking news at

[Later: I have a longer page of links at]

David Langford, if transmitted digitally to Hungary, is subject to VAT at 27%.