Getting paid - bad news for e-traders

The cost of harvesting the money paid by customers on the web is prohibitive and the cash-flow disastrous. Unless you are a very large organisation, you have to use one of the secure payment providers. Not only do they take 4% to 9% of the payments, but they sit on your customers' money as some sort of guarantee of delivery.

But when the tax authorities become embroiled, matters become even more imaginatively complicated. If you are trading in chocolates, life is simple. Car importing becomes more complex as different tax regimes get involved. But real confusion is produced when information is traded.

Books do not attract a sales tax in the UK, but transfer the story to a tape and the medium attracts tax. Then try to define where the supplier is based. The content could be stored on a disk anywhere in the world and downloaded via any number of portable devices, whilst being paid for with an account that is unrelated to the user's domicile. The impossibility of regulating or taxing such transfers has not deterred foolhardy regulators from proposing methods to extract some money from these data flows. Try www.inlandrevenue.gov.uk/e-commerce/ecom11c if you want to monitor their efforts.

Revisionists have spoilt the tale of King Canute and his attempts to turn the tide. Apparently he recognised that there were limits to regal power. It appears that this noble Viking journeyed to Rome to try an negotiate a peaceful division of Europe between the Northmen and the Holy Roman Empire. Sadly, modern legislators have abandoned such modesty as spineless defeatism. They remain determined to regulate the ebb and flow of creativity.

© Charles Jones 2001  

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