Had a talk with my new accountant and seems that I have to start charging sales tax for all vip/plasma packs. Which is a huge pain in the ass. But governments suck right?
Sales tax (in the UK) is 15-20%. (My accountant has yet to get back to me about whether non-UK people don`t have to pay this because they are not located in this country, but I`m not going to hold my breath, but if this is true i prolly wont make any changes)
So a few things i could do about this because i don`t really want you guys to feel ripped off.
- 1. Just put on the 15-20% tax and leave things as they are.
- 2. Add the 20% tax on and increase the vip days/plasma in the packs by 10-20%
- 3. Put on the 20% tax and have a 1 in 3 chance of winning extra days/plasma (similar thing to what the mobile company orange is doing in the UK for each topup you make).
I`m open to discussion, until i get a call back from my accountant i cant really do anything. But every purchase made now (as tax isn`t added) the site is gonna lose 15-20% of. But i don`t want to do anything till a)you guys are happy with a result and b) the accountant confirms the situation.
Please give any feedback or suggestions on my forum post. Click here to view the post.
Thanks!
Ash
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39 comments:
Wtf.. I disagree Lol
You can't disagree with the government
Sure we can that was what the Revolution was about :)
I say increase the amounts in the packs. At least that way everyone will have equal benefit.
do what u think is right... the players who really love this game will be loyal no matter what...
say to add the tax and increase by 15% in the packs Ash
I think if you increase the value of the packs by as you suggested adding 20% more to the days or plasma purchased that should be fine.Knowing why you have to do this i think only a few would object.
Damn they do like to tax us in the U.K. though don't they?
I don't really mind paying a few extra bucks for my vip or plasma, to be honest with you. It's a tax increase and that's just what it is, nothing we can do about it. Not even complain.
I choose option 2. Add the stupid tax (we can't stop the inevitable) and increase VIP days. Although it sucks, the other options seem much less efficient for us.
Why don't you charge us 20% less, increase the value of packs by 20% and leave the prices as they are. That makes a whole lot more sense then your options.
I think you should increase the amount by 20% and have the tax. I mean if you are getting more you are not paying more. Then to make things better add tax into the price and that will take all the guess work out.
I say add the 20% tax on and increase the vip days/plasma by the same percentage. I think this way is best and keeps the government and players happy. But, kudos to you Ash for asking us what we think best. Many people would have just raised the tax and let the players deal with it. Once again this is a true testament to your character.
You Rock! <3
You have to do what the law says you have to do. I agree with Bianca and others say. add the tax and increase the vip days/plasma a bit.
Once again no matter where you live the govt. is gonna tell you what to do and how to do it. The good thing in this case You have a say in how you go about doing it. I agree with a majority of all the other people increase everything. But hey whatever you do I will still be here cause this game is pretty entertaining. Any more messed up stuff happens feel free to post at the url below.
why dont you reduce the cost of the pakcs by the 20% margin and then all the packs will be the same price. The government gets their tax and no one here complains
2. Add the 20% tax on and increase the vip days/plasma in the packs by 10-20%
Would be better if you added 20% then we wont mind the extra cost :)
i think its ur choice if you charge tax. if i go and sell something i dont have to charge a tax. this is a game not a business.
Praise the british government:).Tax the hell out of vip.muhahahaha.
Ash will probably have to pay backdated tax too.so all you vip can loose 20% of you vip days;-).i'm loving it.
I would think if something is considered as a thank you gift in return for a "donation", there would be no tax involved, but i don't know how such things work in UK. So do whatever you must, but i really do appreciate you asking for our opinions. Considerate as always. Thank you Ash.
- 2. Add the 20% tax on and increase the vip days/plasma in the packs by 10-20%
Please let me know what they say about US residents having to pay the taxes. Not sure why I have to pay 20% (yikes.. really??) so I guess increasing the packs would be my vote.
Considering it clearly states this is a donation, and not payment for services, then I don't understand how it can be taxed. Of course I'm sure it could be different in the UK (I'm in the USA) Better talk to your accountant again and make sure they understand these are donations, not payments for services/product.
Can we have some other quests please
WTF do other quests have to do with tax on VIP? ugh!!
Option 2 is my vote Ash- it's more than fair and covers your end of things too.
I agree, you should talk to your accountant again, while I am also not in the UK, you really shouldn't have to pay a tax for donations. O.o
Aside from that, if you do raise it. I vote for option 2. :)
Well having to pay 20% to the UK is not my idea of fun since I live in the states, but if we have to then so be it. I would rather things be legal for you Ash and the site stays operating.
A) “Donations” are not taxable. Your “accountant” is a twit.
B) People outside your country (or in the US’s case, outside of the state of which the goods are purchased) are NOT taxable. (By the Seller, technically the buyer is supposed to claim untaxed purchases at the end of the year, though they never do).
C) Don’t be greedy. If you must pay a tax, passing on that additional cost to your members will only mean LESS donations.
D) If you feel or are informed that you MUST collect a tax then the realistic answer, as to not piss anyone off and as a result prevent them from ever donating would be to reduce the amount of the packs such that after the “tax” is added, it puts the price back at the original price.
Ie: a $25 pack’s price would be reduced to $20.83 with a 20% tax would bring it to $25
Here is the table for the rest:
$4.20 + 20% tax = $5.04
$37.49 + 20% tax = $45
$41.67 + 20% tax = $50
$83.33 + 20% tax = $100
$208.33 + 20% tax = $250
Doing this would show it as a tax and would not make the people feel screwed. Sure, it means less $ for you per donation, but it is YOUR countries tax after all. Plus, I’d be willing to bet that more than 1 in 5 people would choose not to donate if they were taxed for another countries tax.
Not to mention that there are SEVERAL ways around it that if you truly cared about finding out, you could.
That’s just my thoughts anyway.
The old adage says: In this world, nothing is certain but death and taxes (Benjamin Franklin). so ti seems it has come to the stark light of day to RoB.
Taxes must be observed as to maintain the requirement and your business aflots or eventually, the cost of taxes will overtake your what profit you yield; thus, destroying teh purpose of any business: Profit.
I think the offer of teh increase in VIP days in commiseration of your Tax charge is very generous of you as opposed to simply charging and nothing else. Increases VIP days is always a nice happy medium to my thought.
In perspective, the "cost" of VIP would not have altered drastically as it is being offset with increased time length.
yea, vip and plasma are "donations". you will end up being taxed yourself if you try... what products are you selling now??? if you want to make it better i think that if you were to tax, put it on plasma and weapon packs...
Out of curiosity where does it say that these are donations? I am not sure I have seen that anywhere yet.
If it does say it then most likely it is not taxable, but from what I can see on the site then UK residents could be charged tax since it is a for profit venture.
Should US residents pay the tax? No they should not have to since it is the same if UK residents were using a site in the U.S. they would not be taxed.
Do I want to call Ash greedy? NO he is just trying to comply with the laws of his country and there is nothing wrong with that. He is young yet and tax laws are a pain no matter what country you are in.
20% tax is outragious....but there is no way of getting around it...jeezz pay the tax, increase the pack...dreamgirl of camelaird
anyone for a cup of tea
Okay first off, stop with the accountant bashing. I am doing what i can to get around it, he told me this WORSE CASE SCENARIO . There could be ways to get around it. Yes indeed they are DONATIONS but they come to me so it's classed as my income, which sucks, but thats the way it is, the money has gotta go to SOMEONE it can't just sit in cyberspace. And even money gifts are taxed so you cant get around it that way. Im doing what i can to help this, but at the end of the day the law is the law. I have found files that say non EU countries don't pay UK tax, but i think thats changing in 2010. This is just worse case scenario, anything could happen when i have more discussions with my accountants. Please take this to the forum now, thanks.
This is indeed a business. Just because the items are virtual does not mean he is not providing a service.
Maybe, just maybe, add plasma ( a few) back to straight VIP? And add some extra to the plasma packs. But if you don't wish to do that, by all means a few extra days would be nice.
Do what you must Ash. It would not be fair to UK players if only they have to pay higher prices because of UK taxes. They have to deal with it enough as it is. ( Which is why there is a USA in the first place :P )
Know that most of us are behind you 100 %.
It is a pain, I know. What is worse, is that VAT is going back up shortly, so that is an accounting nightmare.
For what it is worth, I have a lot of int'l billing in my business. We do not charge VAT to any non-EU based invoice. Likewise, we cannot recover any VAT from the HMRC on foreign taxes paid outside the EU. So bad news is that UK-based individuals will most likely get hit with VAT.
Worse news is your back-end accounting gets more complex (my sympathy to you there!)
*Lucid writes a letter to his employer*
"I don't like that I have to pay taxes on MY paycheck, therefore, I demand that you increase my annual salary to compensate me for the difference of what I will have to spend on taxes, so that I can bring home what I would have otherwise made pre-tax on my wages."
Sounds stupid doesn't it?
So does Ash adding "tax" to "donations" (which are NOT taxable) so that he himself doesn't have to pay tax on the $ he earns (as earned income) by running the servers.
Must be nice to have the best of both worlds.
*Contemplates what his employer would reply back to a request for more $ to compensate for the difference in taxes paid*
At least they would likely get a good laugh out of it.
WOW, my sales tax is only 6.5%
Is there an option to find a country where they don't charge sales tax for virutal goods (Iran? Phillipines? UAE?) Just look up one and register your company there, that should solve the problem ;)
Lucid why don't you simply grow up and realize if he has to follow the law he has to follow the law. Sure he has gotten away with it this long, but eventually they do catch up. It is better to comply ahead of them then to have them audit Ash and he has to pay a huge fine or worse.
So big deal we pay some tax is it the end of the world? NO. So if you are so upset about it then go to a free account only or simply do not play the game anymore the choice is yours, but do not bash him for trying to abide by the laws of his country.
Besides if their tax laws are changing to include taxes on donations and services to countries outside his starting next year then he has to be prepared for that as well. Just give him a break some.
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