VAT a mess

Stitching on screen print

Now that I am back to feeling like a human being again, there’s things to take care of. The first thing is related to my business.

You may have heard of the new VAT rules in the EU? I won’t bore you too much with the details (to be honest, I still need to understand them myself), but basically it’s like this: from January 1 next year, anyone based in the EU who sells digital downloads (including patterns and online classes), have to pay VAT in the country of my EU customers.

Currently, you only have to pay the VAT in the country where you live. Unless your sales are below a certain threshold. At the moment I am nowhere near the UK threshold, so I’ve not had to pay any VAT.

There are 28 countries in the EU. So you can see that this is going to potentially be a lot of extra admin. For sure it is going to be a huge pain in the behind and I still have to look into it properly how this is supposed to work.

What does this mean for you?

I need to crunch some numbers and see if I am able to absorb the VAT cost – most of my dear customers are in the US which isn’t affected by this law – so the actual cost of this may not be too bad. However, because this is kinda complicated, I may need to hire someone who is good with these things. If that is the case, or if I have to pay a lot in VAT… there may be a small price increase.

I do not want to raise my prices, but I may be forced to. If a price increase is necessary, I will let you know in advance.

One thing that will change is the currency I use in my shop. At the moment it is in US dollars – so the bulk of my customers see fixed prices. But the exchange rate between UK pounds and US dollars does fluctuate. To make it easier for me to deal with this VAT thing, I will change the shop currency to UK pounds between Christmas and January 1. But more about that when we get closer to those dates.

I have some classes planned for early next year, as well as the 2015 pattern club(s). I was going to announce the pattern club this week anyway, but I will also open for sign ups to the classes now. This way you can grab ’em before a price increase may be necessary.

So, Wednesday to Friday I’ll share the details of those classes and clubs with you. Stay tuned!

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