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Yep, it's a mess that's going to backfire. I'm taking the step of blocking all non-UK EU countries from purchasing. It sucks, but it's the only way I can keep

by adwf 12y ago

Yep, it's a mess that's going to backfire. I'm taking the step of blocking all non-UK EU countries from purchasing. It sucks, but it's the only way I can keep my tiny little bootstrapped company afloat without having a heck of a lot of extra paperwork and filings to do (with commensurate fines if I screw it up).

thibaut_barrere 12y ago
For my SaaS (https://www.wisecashhq.com https://www.wisecashhq.com) I plan to handle it as well as I can (I'm based in France). The plan is first to get to fully understand what needs to be done from my country, then try to sign for a "MOSS" (mini one stop shop). I agree this looks like a major PITA, but luckily Recurly (which I picked for my billing code) seems to have this supported (did not test yet, though). That said I do feel your pain. I feel a bit of fatigue with regards to the increasing challenges that bootstrappers (amongst others) face (eg: cookie law, vat).
- adwf 12y ago
  Yeah, I don't know whether France has a similar exemption, but in the UK currently I do not have to track or even charge VAT until the company has £81k in revenue. I don't even have to register for it. This is really handy for turning a side-project into a small company, as I can just try out various revenue streams without too much bureaucracy. Once I hit £81k of course, I can probably afford to throw money at accountants to take care of it for me! But that critical first bootstrapping stage has become just that little bit more difficult. It's either block the rest of the EU, or get ready to do some paperwork. Or I guess I could become a zero-revenue startup! ;)
  - thibaut_barrere 12y ago
    We have a similar threshold (I believe it is when you reach 15k€ of VAT, to be verified). The bad thing is that I will already roughly reach the threshold because of my main income which is coming from consulting. So bootstrapping based on consulting is becoming a bit harder, paperwork-wise :P
  - phillc73 12y ago
    You need to take a view regarding the type of expenses your company will have too. I run a small, one man, UK Limited company and was for a time VAT registered. This is because when I first started the company I spent a few thousand Pounds on equipment. All the VAT I paid on this equipment was able to be offset against any VAT I collected through invoicing. For a while I was ahead and it helped my cash flow, even factoring in the accountancy bills each quarter (which weren't really all that much). I made this move on advice from my accountant, and at the appropriate time, when I was no longer "ahead" on VAT, I was advised to de-register for VAT. My revenues still aren't £81k.
petercooper 12y ago
Don't block non-UK EU buyers who have a VAT number though! The new laws only apply to B2C sales, not B2B, and I suspect the majority of SAAS customers are businesses anyway.
- adwf 12y ago
  True, but if I want to take VAT numbers I have to be registered for VAT anyway and then do UK quarterly filings. I'd voluntarily lose the £81k exemption in this case regardless. A VAT MOSS filing on top of that would not be too much hassle. Seeing as I'm not quite localised for Europe anyway, I don't think it's a huge deal blocking them at the moment. I'd much rather provide a good french service to France and a german service to Germany. But obviously I want to open that market up as soon as I possibly can, whether it's perfectly localised or not. This law just adds some delays.
  - petercooper 12y ago
    (Disclaimer: I am not a lawyer, and all that jazz ;-) But I do know more about VAT than I probably should for my health..) True, but if I want to take VAT numbers I have to be registered for VAT anyway and then do UK quarterly filings. I don't believe that's true. You have, I assume, been doing both B2B and B2C sales so far, and the law has solely changed in regard to B2C sales on digitally supplied services. The only new requirement for you to avoid needing to charge VAT should be that you'd need evidence to prove a sale isn't B2C on non-UK EU sales only. For that, all you need is a VAT number in the valid format (HMRC notice 741A section 2.7). Handily, you do not even need to do any further validation of the VAT number if the VAT that would be ordinarily charged to that customer is cumulatively less than £500 over 3 months (741A section 19.2). (So if you were providing a service of £100/mo, you shouldn't even need to check their VAT number out! :-)) There's definitely stuff & concepts to get your head around with this, but in theory, still accepting B2B sales within Europe could be as simple as collecting, validating the format of, and storing VAT numbers. If your B2B intra-EU sales are too low to make this worthwhile, of course, then yeah, it makes sense to block them (and in my research, it appears this is legal), but if you're doing several grand's worth, say.. it might be worth considering the above. Good luck whichever way you go! :-)

by adwf 12y ago

thibaut_barrere 12y ago

For my SaaS (https://www.wisecashhq.com https://www.wisecashhq.com) I plan to handle it as well as I can (I'm based in France). The plan is first to get to fully understand what needs to be done from my country, then try to sign for a "MOSS" (mini one stop shop). I agree this looks like a major PITA, but luckily Recurly (which I picked for my billing code) seems to have this supported (did not test yet, though). That said I do feel your pain. I feel a bit of fatigue with regards to the increasing challenges that bootstrappers (amongst others) face (eg: cookie law, vat).

adwf 12y ago
Yeah, I don't know whether France has a similar exemption, but in the UK currently I do not have to track or even charge VAT until the company has £81k in revenue. I don't even have to register for it. This is really handy for turning a side-project into a small company, as I can just try out various revenue streams without too much bureaucracy. Once I hit £81k of course, I can probably afford to throw money at accountants to take care of it for me! But that critical first bootstrapping stage has become just that little bit more difficult. It's either block the rest of the EU, or get ready to do some paperwork. Or I guess I could become a zero-revenue startup! ;)
- thibaut_barrere 12y ago
  We have a similar threshold (I believe it is when you reach 15k€ of VAT, to be verified). The bad thing is that I will already roughly reach the threshold because of my main income which is coming from consulting. So bootstrapping based on consulting is becoming a bit harder, paperwork-wise :P
- phillc73 12y ago
  You need to take a view regarding the type of expenses your company will have too. I run a small, one man, UK Limited company and was for a time VAT registered. This is because when I first started the company I spent a few thousand Pounds on equipment. All the VAT I paid on this equipment was able to be offset against any VAT I collected through invoicing. For a while I was ahead and it helped my cash flow, even factoring in the accountancy bills each quarter (which weren't really all that much). I made this move on advice from my accountant, and at the appropriate time, when I was no longer "ahead" on VAT, I was advised to de-register for VAT. My revenues still aren't £81k.

petercooper 12y ago

Don't block non-UK EU buyers who have a VAT number though! The new laws only apply to B2C sales, not B2B, and I suspect the majority of SAAS customers are businesses anyway.

adwf 12y ago
True, but if I want to take VAT numbers I have to be registered for VAT anyway and then do UK quarterly filings. I'd voluntarily lose the £81k exemption in this case regardless. A VAT MOSS filing on top of that would not be too much hassle. Seeing as I'm not quite localised for Europe anyway, I don't think it's a huge deal blocking them at the moment. I'd much rather provide a good french service to France and a german service to Germany. But obviously I want to open that market up as soon as I possibly can, whether it's perfectly localised or not. This law just adds some delays.
- petercooper 12y ago
  (Disclaimer: I am not a lawyer, and all that jazz ;-) But I do know more about VAT than I probably should for my health..) True, but if I want to take VAT numbers I have to be registered for VAT anyway and then do UK quarterly filings. I don't believe that's true. You have, I assume, been doing both B2B and B2C sales so far, and the law has solely changed in regard to B2C sales on digitally supplied services. The only new requirement for you to avoid needing to charge VAT should be that you'd need evidence to prove a sale isn't B2C on non-UK EU sales only. For that, all you need is a VAT number in the valid format (HMRC notice 741A section 2.7). Handily, you do not even need to do any further validation of the VAT number if the VAT that would be ordinarily charged to that customer is cumulatively less than £500 over 3 months (741A section 19.2). (So if you were providing a service of £100/mo, you shouldn't even need to check their VAT number out! :-)) There's definitely stuff & concepts to get your head around with this, but in theory, still accepting B2B sales within Europe could be as simple as collecting, validating the format of, and storing VAT numbers. If your B2B intra-EU sales are too low to make this worthwhile, of course, then yeah, it makes sense to block them (and in my research, it appears this is legal), but if you're doing several grand's worth, say.. it might be worth considering the above. Good luck whichever way you go! :-)