First off, this is not being posted so I can get a lot of sympathetic comments or suggestions that I’d be better off living in the US (or Panama). I know I’d be better off in the US and I don’t need the sympathy, really. I just want to get this off my chest and maybe provide a cautionary note for anyone else who might end up in this position. If you actually know something that might help, please comment.
Second, this might get lengthy. Feel free to ignore my moaning and tldr. Aside from a comment about how it’s affecting my work, this is not about books.
So, with all the glorious fun we’re having with the Panama leaks and all that, tax is something of a hot button topic. Everyone seems to be ranting and raving about rich people avoiding tax payments. Everyone hates all these large companies who avoid paying tax in various countries by exploiting the laws the people we voted for set up. I have to say that I cannot blame them, any of them, even if I think they should be paying their due.
I am not rich and I highly doubt I ever will be. Every time I think I might make some money, someone in a government office seems to decide they need it instead. I quit my day job to write full time because the income from the two jobs was high enough that I ended up paying out about what my day job was giving me in additional taxes. What was the point in working a 16 hour day (8 hours in an office and 8 writing at home) when the end result was that I only really got paid for half my time? Why not quit the job I alternately hated and disliked, and do the one I liked doing full time? So, no more day job and my tax bill for the tax year just gone should be significantly lower. Great.
And then I get a letter telling me that I have to have an interview with a man from the HMRC (that’s the IRS for you guys in America) about Value Added Tax. I had not even considered the possibility of needing VAT registration. I, as an entity, do not sell anything. I provide my books to entities who make them available for retail purchase, and charge VAT (or sales tax, or whatever) appropriately. The EU has made all that increasingly difficult over the last little while, apparently out of a desire to make sure the small business they say they wish to promote fail, but it wasn’t a concern because retailers handled that. But today I had a telephone interview involving a man asking questions and me becoming increasingly angry and frustrated the more he went on.
It seems that the government wants VAT payments from me, for services which I have not charged VAT for. Probably a fairly large amount of money is involved and, knowing how this works, additional charges for not paying it earlier. (To be fair to the HMRC, if they overcharge you, they actually pay quite a good rate of interest when they give the money back. It’s better than savings rates anyway. But they do like making you pay for your mistakes.) As far as I can see, this leaves the government getting two VAT payments for the sale of the same items (books), and me losing a lot of money. Nice for MPs’ expense accounts, not so great for me.
The only hope I currently have is that Amazon KDP and Smashwords are both US companies, so this may count as an export and be zero-rated for VAT, thus negating the problem. I’m looking into that and getting nowhere with the legalese. Maybe only EU sales apply, then I’d be under the limit for registration and it wouldn’t be an issue (the US is by far my largest market, and thank you guys for that). No decision on all this has been made, and I may be worrying over nothing, but it’s coming on top of a load of other personal crap which I have to worry about and it’s just about the last straw.
It seems like, for all the rhetoric, the last thing anyone in the UK wants is for someone to be successful. We penalise success. I was hoping to get Frostburn wrapped this week and move on to the new Fox book, Emergence (that’s the working title, btw, it could change). Right now I’m not feeling very creative. The thought of jacking it all in has crossed my mind. Don’t worry, I won’t. I doubt I could if I tried. This is going to delay things while I sort it out (in my head as much as all the paperwork I’m being asked to provide).
If you got to this paragraph without giving up: thank you, I actually feel better for writing it down. Hopefully I’ll provide an update to this post giving good news about how it all turned out okay, or not. If you find yourself writing books in the EU and having some success at it, I suggest you consult someone regarding possible VAT issues. If you’ve already met this, I’d love to know what happened.
Once again, thanks for letting me rant at you. Have a much better day than I’m having,
Niall.
PS. The musical accompaniment for this post is Meatloaf’s Life is a Lemon and I Want My Money Back. YouTube link provided.
Witches and Ray-Guns 