In short:

• New VAT requirements (VATMoss) came into force on January 1st 2015 requiring all digital sales in the UK to charge VAT.
• FundYourFilm's workaround: if purchasing the book within the European Union you must purchase the Film Finance Handbook Service Bundle for £33, which includes the chance to ask one of the books authors a question. 
• For buyers in the rest of the world and the UK (ie outside of the EU or in the UK) an £18 download only option is also available. As far as we know this is not discriminatory to the rest of the EU, but this option may need to be stopped at a later point.

One the 1st January 2015, new EU legislation came into force in the UK requiring VAT on digital sales within the EU to be charged at point of purchase rather than at point of sale. This requires a company or individual involved in the sale of any digital goods in the EU (ie Video-on-Demand, Albums, Software plugins, eBooks, training videos, etc) to either register for VAT in every EU country, or register for VAT in the UK and then register for the VATMoss service provided by HMRC and rebuild their online shop to capture new information. This is required even if the company is below the VAT threshold.

While the legislation was designed to prevent companies such as Amazon registering in a low VAT country like Luxembourg and charging 5% on sales across the EU, by not having a threshold on the registration point the reality is it supports central portals over small direct sellers and digital micro-businesses like this website who need to spend a lot of time even for a few hundred pounds of sales a year. 

While HMRC appears too under-funded to advertise the changes very widely to businesses which means many are unaware of the rule changes, the blogosphere has been highly proactive in sharing information, workarounds and calling for modifications to the rules, which seem to have been designed and written in a climate of chaos with no understanding of the reality of selling digital goods on a small, 'sole trader' scale. Other countries have implemented the legislation differently, with more consideration to the new and struggling digital and longtail industries. There are also some promising-looking software solutions appearing, for instance this plugin for Wordpress WooCommerce that links with Taxamo, a new SaaS offering Vatmoss compliance that is free for up to 20 transactions a month.

Netribution Ltd, the legal operator of FundYourFilm.com originally decided to simply stop online sales as so few are made here the income doesn't justify the tech work and bureaucracy time. Netribution Ltd had already de-registered from VAT a few years ago after starting to sell eBooks and realising that unlike printed books these carried a VAT charge, and this required a more complex (and costly) book-keeping regime.

But just in time for Christmas, Netribution's accountants, the Kelvin Partnership, highlighted an article by Rebecca Cave pointing out that the legislation only applies to digital services with 'minimal human intervention'. So provided there is a certain amount of human intervention, for instance myself answering a question relating to the book, then it does not come under the jurisdiction of the legislation.

As a result we have two new levels of sales for the funding book:

• For the the world excluding the EU, plus the UK - download at £18.
• For the EU (and anyone who wants it) - download plus any question answered, if possible, with up to 300 words response (in the event of a question being outside of my knowledge up to five alternative questions can be asked) - £33.

To the best of my knowledge (and this article is not legal or financial advice!) this offers a legitimate workaround to the new legislation. A filmmaker offering to sell their film online through their website could avoid the new requirements by including some human interaction, such as answering a question or creating a personal message.