I received an email from someone in the UK about this situation and they said something that made a lot of sense but that I have not seen mentioned here. Basically it is one thing using a loophole i.e. incorporating an element of live delivery in a product. However it is another thing using the loophole in such a way that it does not look like tax evasion. In other words to keep yourself out of the danger zone you need to be able to make a good case for structuring your products in this way. The problem is that the aim has always been to have automatically delivered products so develop assets that generate passive income. So why suddenly do you change from that model to including an element of live interaction if it is not to get out of the way of the VAT change. Like many people have said it is like taking a step backwards. Why would you want to go backwards if it was not tax evasion? By all means use this loophole but if you do you have to be prepared to make a good business case for it. When I first read that someone had been advised not to go this route as it looked like tax evasion I thought how could this be. After all some people have been doing this for other reasons for a long time. This then got me thinking if you can make a good business case for using a live element then you should be safe from accusations of tax evasion. After all you might have already been doing this or considering doing it before you realised that it would be help you escape the horrors of VAT.You just have to be able to explain why you would do it if VAT was not part of the reason why you are doing it.
Posted on: Tue, 30 Dec 2014 19:32:47 +0000