UK/EU VAT update..

I’m sharing these wranglings in the interest of transparency. For me, crafting and running this business is a journey: it’s a creative endeavour, a site of spiritual growth, and an ongoing experiment. It is important for me therefore to share my in-progress workings, so customers and other business owners can see ‘behind the scenes’.

Hello again wonderful customers. This is an update for UK-based customers, who were affected last week by a price-hike to cover VAT. I wrote about that here.

Last week, I was told by my accountants that I would need to start adding VAT (20%) to all UK sales.

As I explained in the post, this is not money that comes to me, it is paid straight to the government. I also found out that I had a (very) large bill of VAT already owing. The ins and outs of that are between my accountants and I, but as you can imagine, it was a stressful week!

I quickly moved to add VAT to UK sales going forwards (that bill won’t pay itself!) whilst I investigated other options. Cue unhappy customers and unhappy Beth. These prices are unsustainable. But the business is unsustainable without finding that VAT.

What on earth to do?

(Well – I consulted my tarot cards, of course. I may share this with you later – for now, I just want to get this update up onto the blog so folks know what’s happening!)

On paper, adding VAT is the only sensible option. I have to give the government 20% of my UK (and EU, it now transpires) sales – that’s on top of the usual other taxes), and VAT is supposed to be charged to the customer. I’m not moaning about taxes here – this is just how it works, and I am a big believer in higher taxes as redistribution of wealth. I want to pay my share. And besides, even with VAT added, UK customers are still saving a few pounds on, for example, purchasing from the US.

But emotionally? In my heart and gut? This just doesn’t work for me. And it clearly doesn’t work for my customers!

This shop is a ‘treat shop’, I understand that. These goods are independently published and most cost a lot of money. However, I have always endeavoured to offer them at the lowest sustainable price – (balancing this against my principle of not competing with the creators whose works I sell). I am concerned with the accessibility of spiritual tools and what I see as a ‘gentrification’ of spirituality in the mainstream. I do not want my business to be part of that.

So! I need to find another solution.

This shop is my pride and joy! I love Little Red Tarot early and want to keep trading. I don’t want to lose the trust and custom of folks who have been here for years and with whom I have built friendly, collaborative, trusting with relationships. Not to mention the solid working relationships I’ve built with the many, many wonderful artists who supply all these goodies. LRT has an ecosystem of friendly relationships, and this is a source of sustenance to me as much as the livelihood.

In terms of that livelihood – I am not interested in ever-increasing profit, I only want to sustain my (humble-yet-joyful!) lifestyle and pay my bills. LRT has been sustaining me happily for some time. I breached ‘enough-ness’ long before I breached the VAT threshold.

The only alternative to charging VAT is to bring UK sales down below the threshold. I.e., to reduce UK sales. I.e., to do the opposite of common business sense, which is all about growth. It somehow makes sense to me. Oblivious to my VAT situation, at new year, I wrote down my business goals for 2019, and they centred on one thing:

Stay small.

How to do this? It’s a work in progress! I have experimented in the past couple of years with a wide range of different products – many of them not tarot. As the shop’s income increased, I didn’t pocket the profit, I used it to experiment with different stock, in line with customer requests.

Unfortunately, this has been all too successful – literally, LRT is a victim of its own success, as we now see!

So – I’m now working through my product list, deciding which things to retire (books, mostly). I want to hone the range back down to the original vision – the most wonderful, magical and radical independently-created tarot and oracle decks I can find. I want LRT to be the go-to site for indie tarot and radical magic, but that doesn’t have to mean selling every single deck and book customers suggest. Such changes will, however, happen very slowly.

UK and EU prices are now also marginally higher than previously (nothing like the 20% increase I previously applied to UK sales.) I am working every day with my accountant on this, to work out a sustainable way to slowly, gently bring things back under the VAT threshold by reducing the range on offer.

As this journey continues, I will keep updating the blog, so anyone who is interested can see my wranglings.

For now, with love and gratitude, thanks for reading, and for your support so far.

Beth x

9 comments

  1. Luna J says:

    It’s a shame that stock is now hidden from U.K. customers which means we will have to shop elsewhere. However, wouldn’t it make more sense to remove these items instead and put the decks back? I don’t see how it make sense to sell decks to EU and U.K. customers they can already buy here.

    What about if you want to stay small do not sell U.K. and Europe decks to U.K. and EU customers, let them buy direct. How about stopping US customers buying decks that come from the US? How about removing U.K. decks, such as Lisa’s textured tarot etc from US people and make them buy direct, which is exactly what’s happening here but in reverse.

    Why sell Starchild decks to people in US and Canada when the decks is from that part of the world? Don’t let them buy them and block them as it’s happened here.

    Next World Tarot (can be bought from amazon)
    Textured Tarot (can be bought direct from U.K. creator)
    Cosmic Woman Tarot (can be bought in the EU for the same price)
    White Sage Tarot (can be bought from amazon)
    Green wheel tarot (can be bought directly from U.K. creator)
    Life Design Cards (can be bought from U.K. creator)
    Tree Wisdom Cards (can be be from U.K. creator)
    Plant Ally Cards (can be bought from U.K. creator)

    There’s 8 decks already that you could remove from EU/U.K. shoppers.

    Remove sprays and altar cloths from the shop. Stop selling U.K. based calendars (earth pathways, if people have to buy direct it actually benefits them more) Stop selling calendars full stop, it seems they don’t do to well anyway.

    Remove all books that are sold by amazon, there’s at least 7 books there that could stop being sold on the shop, leave amazon to the books? The books are priced higher than big book retailers, how about reducing the prices massively to sell the stock and don’t stock them again. Remove guidebooks from some decks that aren’t exactly needed such as the book for Pagan Otherworlds.

    If you have 10 starchild decks and 10 U.K. customers want them let them have them and don’t let US Canada have those 10 decks. It’s the same money coming in just from a different source, it still pays bills. Then stop UK/EU from buying decks that are sold and created in the U.K./EU.

    I’ve shopped and supported LRT and the blog for years and if I’m honest this is bollocks really. I think the choice here is you either want to stay small and don’t let UK people buy from a U.K. shop which doesn’t make much sense to sell US decks to US /CA people. Stay small and committed to the U.K./EU your own front door so to speak. Or keep decks low in numbers and don’t have a wide range, or rotate the range when it sells out. When A sells out replace that with B and then when B sells out stock A again.
    Or you let the business grow and if having the extra money doesn’t suit you, donate that money to causes that align, women’s shelters, Pagan charities etc. If I wanted to stay small or I needed to lower things as in this case, I’d cut sales to areas outside of the U.K./EU off and lower the range.

    • Sarak K says:

      I think this is a fantastic idea! I would far rather buy the new Starchild than a deck that I can easily get from the UK anyway. It makes a lot more sense and I hope it is something that Beth will seriously implement.

      • Beth says:

        Thanks Sarah. I’m really spending a lot of time and thought on what I want to stock going forwards. Meanwhile the Starchild Tarot is back on the shelves for everybody.

        Sorry this is such a bloody rollercoaster!

    • Beth says:

      Thanks for feedback both! I’m listening to everything and trying to work out the best way forward as I hope this post shows.

      The first thing to say is, these decks are back on the shelves for everyone. I had misgivings about ‘hiding’ certain things, then decided it was the right way (because it would bring down sales and help me make prices accessible again) so I tried it, sat with it for a few hours…and ultimately came to feel that this wasn’t right.

      You say: “Why sell Starchild decks to people in US and Canada when the decks is from that part of the world? Don’t let them buy them”

      My primary focus has always been bringing these decks to the UK and Europe and serving my ‘local’ community. But it’s important to understand that VAT is only charged on UK and EU sales. I’m not penalised for selling to the US and Canada countries, and I have the stock here to sell. There is no benefit to preventing customers in North America buy them – then they would just sit on the shelf! Yet if I sell them in the UK or EU, I have to pay 20% VAT which means I’m selling at a loss – or I add the VAT on, which caused uproar and makes all items (not only Starchild decks) inaccessible.

      It’s the kind of problem a larger business – or one with its sights set higher than mine, could take in its stride – registering for VAT is part of growing from micro-business to the next level and beyond. But because I don’t actually want to grow LRT, this specific moment is a real rock-and-a-hard-place til I can get us through it!

      As for the other decks you mention, yes, those are on my list in terms of more slowly reducing the range (Next World wasn’t on Amazon when I pre-ordered it, so I’m still selling what I have from that shipment). And I have already decided to stop selling most books. My passion has always been for the ‘smaller’ decks, and I will be keeping my focus on these.

      I also want to stress that VAT is charged on turnover (i.e. total income), not profit. The profits LRT makes on each deck – i.e. my living – is relatively small. A company can make a loss, and still have a massive VAT bill – it hits certain sectors (like retail, esp as my suppliers are almost all based outside of the VAT area, so there’s not much I can claim back) worse than others.

      You say “This is bollocks”. It’s not bollocks – it’s a very real situation that I am trying to solve without leaving people feeling betrayed and hurt, and whilst being transparent and human as I work it all through. I haven’t had business training and I am learning as I go.

      Whichever way I turn, it feels impossible, because there’s no way to mitigate the giant VAT bill I’m already facing. But I will keep working on this, there has to be a solution. I really appreciate the feedback as I figure this out.

  2. Rose Fewtrell says:

    Thanks for this Beth, it sounds as though you are really putting a lot of thought into this and I am sure everyone will appreciate it.
    I think that the idea Luna has sounds good in that UK people can get UK decks elsewhere if it means that otherwise they would miss out on decks from further afield.
    I, for one, appreciate you unhiding the decks :)

    • Beth says:

      Thanks Rose. I’m really grateful that long-term customers are taking the time to wade in here – and am just sorry (and slightly embarrassed) this is all such a messy rollercoaster!

      Logging off now to get some rest and celebrate spring equinox!

      More wrangling to follow no doubt ;)

  3. Maria-Anna says:

    Thank you Beth for doing all this work! I am sure it is exhausting and emotional – what a way to start spring! But I for one very much appreciate it and I think you are absolutely right to stick with your conviction to stay small, sustainable and in line with your ethics, since this is what you set out to do in the first place.

    Just a thought re books – but do items that are VAT-exempt (like books) actually contribute towards the VAT qualifying turnover?

    • Maria-Anna says:

      Apologies, I think I’ve answered my own question – apparently books aren’t exempt, but rather 0%, which is not the same thing it turns out…

      • Beth says:

        Thanks Maria-Anna!

        Yes, it makes a difference. So if we get to be on the flat-rate scheme (which I’m leaning towards because it means a lot less paperwork, though we then don’t get to claim VAT back, and we pay SO much in import VAT at the moment!) we have to pay VAT on books as well as everything else. Or if we’re on the standard scheme, we don’t have to charge or pay VAT on books.

        As it is, I’ve not added VAT to books – I am resigned to selling these pretty much at cost price (assuming I’m on the flat rate scheme) until they are all gone, and then winding down the witchy bookshop as described in the spring update.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.