Thoughts from a first-time self-publisher Part 28: VAT and Shipping in the UK and EU part 1.

Hey everyone! Welcome back. I accidentally missed last week. Sorry about that!

Best Part of my week (so far): I had an amazing time this past weekend at a pop-up private invite con. I got to play Wolves, Luna Nova, Distilled (woah!), Moonshine Empire, Super Snipers (of course!), and a bunch of other games and prototypes as well as just have a great time hanging out with gamers and fellow designers.

Most stressful part: Read on….

Financials: Backerkit up to $5,215.00.

This Week’s Topic: VAT and shipping in the EU and UK.

If you are reading this blog there is a high likelihood that you are somewhere on the path of self-publishing/ publishing. You may have heard about VAT (Value Added Tax). You may, like me, have glazed over as you attempted to understand its implications for you. You may know way more than I do about this. In any case, bear with me as I have you join me in the middle of figuring all of this out. Please note that I am not a lawyer or expert and none of this should be construed as reliable advice. Do your own research and consult a professional.

What is VAT?
As far as a US based publisher is concerned: VAT is a tax that is assessed to all products coming from outside of the EU and UK (ie- your games). Ultimately, the backer is responsible for paying any VAT owed, but you have the ability to make everything easier for everyone by collecting the tax and submitting it back to the collecting authorities. Failure to collect and pay VAT means that your customers will have their products held up until they pay the VAT. This will slow down your fulfillment, cause a headache for your backers, and is generally seen as bad practice. If you use a pledge manager, they will have the ability to collect VAT for you but you will need to provide a VAT number for them to do so.

Do I need to worry about this?
Are you planning to fulfill orders in the UK and/or EU? If not, you can skip this (and maybe be glad that you did?). If you are, I believe that the short answer is “yes”, even if you believe you have a fulfillment company that is handling everything for you.

But, my fulfillment company is handling everything for me…

I sincerely hope that works out for you. Here are a few different reasons to educate yourself anyway:
1) Responsibility: at the end of the day it is your company that is responsible for: collecting and submitting VAT; making sure your product meets all the required safety testing and standards; and making sure that you’ve taken all the steps necessary to get your product into the hands of your backers. I’ve discovered that there is a bit of a minefield out there to navigate and while there are paid services and professionals to help you, it behooves you to be educated enough to at least ask the right questions.

2) Cost: Using a US based fulfillment company to ship worldwide (outside of the US) is incredibly expensive in most cases. That’s a cost you may be comfortable passing on to your backers or even subsidizing, but having a local fulfillment partner will make a BIG difference in your fulfillment costs (keeping in mind that you also need to factor in the cost of separating your freight into multiple shipments).

3) Think about the Future: If you are planning to do another KS in the future and/or sell products directly from your website, having a warehouse and fulfillment partner in the region and the appropriate credentials and relationships with the local governing bodies will go a long way towards making your game available and reasonably priced. There is a large amount of front-ended work and information to take. in, but some upsides down the road. The shipping prices people are willing to pay (or you are willing to subsidize) during a KS are not necessarily as acceptable post-KS.

So what do I need to do?
I’ve been talking and working with Jonathan at Spiral Galaxy (highly recommend talking with him even if you’re unlikely to use them). Here is a summarized list of the tasks I have in order to use them as a fulfillment partner:

1) Establish an EORI number: Economic Operators Registration and Identification Number. This can be obtained through the Uk.gov website. It is confusing as hell to navigate and figure out how you are supposed to answer some of the questions (especially as someone who does not yet have an actual product to sell, but needs to establish this first). I completed the application and now have a lengthy follow-up questionnaire that I am navigating.

2) Get CA, CE and EN71 Testing / Certification. You have probably heard the advice to just simply put “14+” on the box to avoid the need for safety testing. Per my conversation with Jon, this doesn’t cut it in the UK where board games are classified as “toys” regardless of the intended audience. Your manufacturer can perform these tests and there will be an associated cost.

Next time I will get a little deeper into what the application process involved and some of the other minefields that I alluded to. Thanks for reading!

Galen