The site says artists and labels will not need to register for VAT to sell music through them
Bandcamp have clarified new VAT rules, stating that independent musicians will not have register themselves as VAT-eligible in order to sell digital downloads with them.
Earlier reports suggested that artists would have to be VAT-registered under the new rules, which come into effect on Thursday (January 1) – even if artists only sold one download. However, Bandcamp has now released a statement which says they will take care of that side of things on behalf of the artists, like major online retailers such as iTunes and Amazon, who already incorporate VAT registration as part of their trading agreements. In a statement entitled ‘EU digital VAT changes and Bandcamp’, the independent music site wrote:
If you’ve seen the recent news of changes to EU tax law, you may be wondering how this affects you as an artist or label selling on Bandcamp. The good news is that for digital sales, there is no need for you to register for VAT, submit quarterly reports, and so on. We will take care of all of that for you. If you happened to see our earlier help item about this, we planned to roll out a temporary solution where artists submitted the tax themselves. We’ve decided to accelerate the changes to our system such that the interim step is unnecessary.
A number of artists, including Future Of The Left and Martin Carr, had previously announced that they would no longer sell digital downloads via Bandcamp as they can’t afford to spend the necessary time and money registering themselves for VAT, which stands at 20% in the UK.
The new legislation was introduced by Chancellor of the Exchequer George Osborne to clamp down on firms such as Amazon and Apple, who had been accused of avoiding VAT by not paying tax on the countries downloads were purchased from.
A document in Osborne’s budget of March 2014 stated: “The government will change the taxation rules of intra-EU business to consumer supplies of telecommunications, broadcasting and e-services. From January 1 2015, these services will be taxed in the member state in which the consumer is located, ensuring these are taxed fairly and helping to protect revenue.” It’s estimated the move will raise an extra £300 million annually in taxation.