[Jongseong]

What you are overlooking is that the vast majority of these people (and women are disproportionately represented, including many stay-at-home mums doing this in their spare time) did not have to deal with VAT _at all_ previously because they never came anywhere near the VAT threshold. They have never had to apply for it. Suddenly, they have to register and comply with not one but two government bureaucracies, and submit quarterly statements on the VAT collected. (By the way, the rules affect the sale of digital items, like knitting patterns and ebooks, rather than physical goods like crafts because the VAT threshold is being abolished on digital goods.)

[lotsofmangos]

Or annually with your other tax affairs if your income is less than £1.3 million.

Which means that while it has to be taken into consideration it does not really affect stuff that much.

It is a cost of doing business in the EU and it does make things more complex, but nowhere near as complex as before the EU came into effect.

[Jongseong]

No, VAT MOSS Return periods are calendar quarters, so you need to submit quarterly statements: https://www.gov.uk/government/publications/revenue-and-custo... This has nothing to do with income. This is because anyone who supplies digital services to other EU countries is considered a business. Registering with a couple of government bureaucracies (as an aside, let's see how well they can handle about a million new registrants in 2015 assuming everyone tries to follow the new rules) and completing quarterly VAT returns might be completely normal for small businesses of more than a few people, but for the millions of self-employed people who have never had to deal with any of this (and who are finding out about the rule change only in the last few weeks) this is a nightmare.

[lotsofmangos]

I got the annual thing from here, I got it a bit wrong as the threshold is turnover, not income - https://www.gov.uk/vat-annual-accounting-scheme/overview

VAT Annual Accounting Scheme

You can join the scheme if your estimated VAT taxable turnover is £1.35 million or less.

[Jongseong]

I see. This is a scheme you can apply for once you are VAT registered and are up to date with your VAT returns. I'm not sure how that changes things for first-time VAT registered businesses. For businesses that have not been registered for 12 months or more (i.e. everyone who is applying for the first time), they can still apply but HMRC will advise the amount of the instalments to be paid (monthly by default, quarterly also available) which are usually supposed to be estimated based on the last year's liability. I'd be curious to see how HMRC will react to getting applications for the VAT Annual Accounting Scheme from all the first-time VAT registrants with very little to base their VAT estimates on, but that wouldn't happen unless all these self-employed people had any idea that the scheme existed.