Tuesday 23rd July 2024

Have you heard of VAT MOSS?


A couple of months ago I decided to expand my Etsy store by creating clipart, and selling it on the marketplace – they say the more items your shop has for sale, the more you’ll sell, so I thought I’d give it a shot. The only price I’d have to pay for this stock is the many hours of hard work I put into it – contrary to some people’s beliefs, creating digital artwork is not just a ‘couple of clicks’, but is pretty labour intensive. The first bundle of clipart that I made was Scottish themed as I’d strangely noticed a little gap in the market for Scottish clipart on Etsy. As I uploaded it with eagerness, straight away I noticed my clipart jump to the top of the search results! Then I noticed something odd – The price that I had set for my download was not the price that was appearing on Etsy. After a bit of quick research, I found the problem: VAT MOSS.

But what is VAT MOSS?

VAT Moss stands for Value Added Tax (I bet you knew that part) Mini One Stop Shop. It was introduced January 2015, and is added to any digital downloads that you sell to the EU. Initially I was a bit confused – I am not VAT registered (amongst other things, too much paperwork for my small business to handle), and so I cannot claim any of the benefits that come with VAT registration (like being able to claim back the 20% VAT on business expenses) – so how is it fair to tack an extra 20% onto items that I am trying to sell?

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VAT MOSS isn’t a tax on you, it’s a tax on your consumer.

People have occasionally told me this, but if you’re looking at price points, that extra 20% tacked onto digital downloads may actually put some people off. In a world where people are less likely to pay for stuff they can’t touch, surely VAT MOSS acts as a disincentive to a contemplating consumer. And it’s all very well when you’re selling downloads on Etsy who add the VAT MOSS onto your prices (which is how I even found out about it), but if you’re selling through your own website it’s just another tax that you have to register for, and file quarterly returns- when you’re only selling the odd bundle of clipart, this does feel a tad bit ridiculous.

VAT MOSS was set up to catch out multi-billion dollar corporations like Apple and Google – to stop them from tax-dodging in the EU, and from avoiding the tax that they should have already been paying. But, instead, it’s backfired and is hurting small businesses like Ghost – which their developer John O’Nolan wrote a blog post about back in February 2016.

Maddy Sutherland

Maddy is a freelance illustrator who lives in Glasgow. She's recently graduated and is working hard to make ends meet. Self-employed? Read Maddy's experiences here.

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