VAT on Digital Platforms

(06-07-2020 22:51 )Rake Wrote:  Three years' back tax recovery templating is standard procedure for HMRC in such situations. It's what they did for example to the BBC performers who got paid as independent contractors and were then hit by the IR35 stuff.

This is incorrect. 3 years back tax recovery is not standard procedure for HMRC. The time limits applicable to tax recovery actions are 4 years (innocent mistakes), 6 years (careless mistakes), 12 years (mistakes involving offshore dealings), and 20 years (deliberate tax evasion).

The BBC performers referred to were not subject to 3 years back tax recovery as stated above, but initially 6 years. When the case came to court though the judge knocked it down to 4 years, ruling that the mistakes made were innocent rather than careless.

(06-07-2020 22:51 )Rake Wrote:  IR35 started with IT contractors and now has worked it's way through private drs, BBC 'stars' and now adult stars and their employers/platforms.

This is incorrect. There is no IR35 investigation into adult stars and their employers/platforms, and neither is there any reason why there should be. The self-employed status of 'models' is not in dispute.

VAT investigations are another matter entirely and are dealt with by a different division of HMRC. They have been investigating digital platforms for years and not just those used by 'adult stars'.

Music download sites have been a particular target in the last few years, but the same would apply to downloads of films, books, games, computer software etc. It's not an adult industry thing.

Izunia has announced today that's she left OnlyFans and moved to Patreon. I don't know if it's related to the VAT issue since Patreon charges VAT.

whether Patreon charge less than OF I'm not sure....I wonder if this will lead to us having to pay for youtube content directly from youtube?

main thing was onlyfans handled it very late and very badly.
isnt the turnover needed for VAT £85,000??
most of the girls wont be getting near that...only top 1% means 99% its a no.

(08-07-2020 12:37 )tony confederate Wrote:  It's not an adult industry thing.

OF are an adult site, are they not?

(08-07-2020 15:55 )Rake Wrote:  OF are an adult site, are they not?

No. Not according to OnlyFans anyway. They say their top creators these days are not adult workers, but musicians, youtubers, celebrities and influencers like Caroline Calloway. To show it's importance in the music world, OnlyFans even got a shoutout recently in a recording released by none other than Beyoncé. If you believe OnlyFans themselves, adult workers are a small minority on there nowadays.

for what it's worth, i e-mailed Onlyfans when this first started (before this thread):

My question:

Quote:Can you please explain how you're able to collect VAT on behalf of the creators, when in the UK, VAT is only payable if the creator earns above a certain threshold and you have no idea of the creators total earnings?

Additionally, tips that are freely given (as they are on your site) are exempt from VAT, so why are you charging VAT on them?

Their answer:

Quote:The Value Added Tax, or VAT, in the European Union is a general, broadly based consumption tax assessed on the value added to goods and services. It applies more or less to all goods and services that are bought and sold for use or consumption in the European Union.

For now, it is applicable to EU (European Union) countries and the United Kingdom.

It only applies to fans. Before payment processing, they’re getting a notification with info about additional charge.

(07-07-2020 15:47 )winsaw Wrote:  i wonder if some of the girls hadn't been paying all they should so HMRC is removing them from the equation

HMRC can't simply decide for themselves who's in the VAT equation and who isn't. The law doesn't provide them with that kind of power.

Who decides who is the priority to be pursued for money?

(19-07-2020 16:38 )ShandyHand Wrote:  Who decides who is the priority to be pursued for money?

The law decides.