Tax Investigation

Yesterday we had a woman from the tax office here having a nose around.

Facepunch doesn’t really pay a lot of VAT because we don’t sell GMod straight to the end user – we get a royalties cheque from Valve every month. The only VAT we charge is on the forum upgrade system.. so when people buy titles or upgrade to gold membership etc.

So every we always get a VAT refund from them for all the shit we buy, our accountancy/legal fees and our rent. So it’s routine for them to check into people like us – because they’d kind of be idiots if they didn’t.

But there’s a problem. No-one can agree what the rules are for these forum upgrades. Should we be charging VAT at all? Should we be charging VAT to people only in the EU? Should we be charging it to everyone in the world? Even the tax woman didn’t really know, and kept flip flopping between different answers. Our accountants have told us to charge people in the EU – so that’s what we’ve been doing.

It seems kind of crazy that something that should be so simple would have so many different rules, that are so ambiguous that you can bend them whatever way you want. If the people running it don’t know the rules – what chance does anyone else stand?

7 thoughts on “Tax Investigation

  1. I can think of a few reasons why you should and should not charge it to everyone.
    A: Is the server(s) hosting the website hosted out of the EU, If yes then everyone is sending/receiving information from the EU and thus should conform to their rules.
    Example: I fly over to EU, purchase a can of soup, fly back to the USA and eat it then sue the corner store I purchased it from because I didn’t use the product in the country I purchased it from. Incorrect.
    That may be a stretch of an example but I think you get my point. The other three examples have slipped out of my sleep deprived mind.

  2. As someone who recently registered their business for tax with the HMRC I agree completely. It’s a chew on. “Tax doesn’t have to be taxing”, Bollocks. And I don’t have an accountant, I do all the book keeping. It gets even worse when you have vehicles to consider into the tax calculation, mileage allowances and all that.

  3. You better no come to spain because here all the laws are as ambiguous as they can be. Even the fines are given in ranges such as 100-6000€. Nothing is clear.

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