Publishers have been urged to prepare for the sweeping changes to tax which will be introduced in 2015.
From 1st January 2015, the way VAT is dealt with across Europe for e-services, including e-books, will change, with the tax applied in the country where the consumer lives rather than where the supplier is based.
At a webinar held this week by the Independent Publishers Guild in association with the Publishers Association, advice was given by Luigi Lungarella and Ian Singer of accountancy firm PKF Littlejohn, alongside Andrew Webb from HMRC.
Lungarella warned: “The majority of UK publishers will be affected . . . UK publishers are relatively inexperienced when it comes to VAT matters, thanks to print books not being VAT listed, but I would strongly advise them to become involved now.”
Rather than dealing with VAT returns for each individual EU state, a mini one-stop shop (MOSS) is being set up, an optional service that will enable businesses to register in only one country.
Lungarella urged publishers to be clear on all their contracts with retailers about what tax is applicable. He said: “It is a very different situation where you are selling through, for example, Amazon, and selling through your own website. Publishers need to be aware of their terms and contract arrangements.”
Singer said: “All of [publishers’] IT services will be affected, from their e-commerce platforms through to bibliographic data . . . I know from experience how projects can overrun on time and cost, but there is a definite cut off date for this, and publishers should start the process now.”