Are there any plans for Ribblr to deal with the VAT for kitchen table businesses such as ours? Ravelry, Etsy, etc already deal with the VAT for designers. Unfortunately because until this happens we won’t be able to sell our patterns here.
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Hi Faye and welcome to Ribblr!
At present, Ribblr acts as a third-party to each sale, and therefore we cannot handle VAT on your behalf as the payment goes directly to you from the customer.
Please note that you can find the information of each transaction on your shop manager and even more details on your Stripe dashboard.
The EU and most countries have different threshold that you need to reach before VAT/sale tax applies.
In the UK, for example, charging VAT for digital patterns is not required.
We do understand that dealing with tax is never easy, and we intend to provide more tools and support for designers as we grow. Thanks for your patience!
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Actually in the UK, whether your turnover is under the threshold you still need to be VAT registered if you have transactions coming from outside the UK. You also need to deal with registering with each country you sell to. It’s very complicated to explain, and it does in fact apply to digital downloads. It has become more complicated since Brexit.
As a tiny business, having to deal with VAT on this scale is enormous, especially with all the checks that need to be done per person/transaction.
Hence why I asked if you would go down the same route as Ravelry for example who deal with it on your behalf.
But nevemind. I shall only be able to add free patterns and use this platform as a way of advertising instead.
Thanks for your response though.
The threshold for non EU countries selling into the EU is £0.00 and, as the UK is no longer in the EU, we are required to charge EU VAT on every sale based on the EU customers location and pay it to the EU customers government. The individual country thresholds and rules only apply if you are resident in that country.
Actually, as the platform facilitating the transaction ribblr is legally required to handle VAT.
If you are a business making supplies of digital services to UK consumers, those supplies are liable to UK VAT. If you make supplies of digital services to consumers outside the UK these are not liable to UK VAT. They may be liable to VAT in the country where the consumer is based. If you supply digital services to consumers via a third party platform or marketplace, the digital platform is responsible for accounting for VAT on the supply instead of you.
From “VAT rules for supplies of digital services to consumers”, www . gov . uk
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Thanks @TalviKnits I hadn’t realised that the government had said that the platforms are now required to deal with it. That’s good to know.
Oh it’s nothing new. The obligation for platforms to handle VAT has been in the digital services legislation from the very beginning it was introduced (January 2015). Sites like Ravelry, Etsy, or Payhip are not doing it because they want to (I’m sure they’d prefer not to) or because they want to help out small-scale businesses. They handle VAT because they have to.
Ribblr is no exception.
I know that Payhip actually set theirs up before the legislation as they worked closely with my friend over about 30 hours with messages back and forth. Sadly Ravelry took their time to set it up.
Ravelry was actually quite quick to set up a workaround (with LoveCrafts) when this was all brand new, and it was ready to go when the legislation came into effect. Within four months they had their own solution.
Thank you for your concern. We appreciate your input however the information provided is not entirely accurate. Rest assured, our legal experts follow and advise on all requirements based on the structure of the business. Any designers concerns can be sent to support@ribblr.com
Can you let us know what the current situation is regarding overseas sales. EU VAT, Aus GST and USA sales tax please. I am trying to find information before i start uploading paid patterns to ribblr . do you have a link you can share or more updated info as this post is from 2021 . Many Thanks Deb
As I understand it, there are no pdf download as the patterns are all stored in the app and therefore bypasses the EU VAT debacle.