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Precinct Omega Podcast - News #44 - Tax, Kill Team & Overdrive
🕑 Added 2021-07-30 11:01:04 +0000 UTCNEWS
Oh, Lordy, we have to talk about tax again.
On 1st July, the European Union introduced new rules regarding the payment of fees on goods imported to any of their member countries. Obviously, this no longer includes the UK. However, other than the fact that UK-based companies importing to the EU are also affected by this, this has nothing to do with Brexit.
Inevitably, small businesses all over the world - and even some quite large ones - are losing their frickin’ minds over this change, but - as with the last issues that arose as an actual result of Brexit - this isn’t quite the big deal people think it is. I’ll break it down as best I can and explain what you need to know, whether you’re a small enterprise entrepreneur in miniatures wargaming or a customer of such.
In the context of the episode a couple of weeks ago in which I talked about starter sets, and the fact that I seem to have fallen into doing a series of livestream episodes reviewing sci-fi skirmish games, I suppose I have to mention that Games Workshop is releasing a new version of Kill Team and, at first sight, it might actually be good.
Finally, this week, we’ll take a brief look at Mantic’s new arena combat game, Overdrive. They teased it a few weeks ago, but as we approach the release date, more and more details are being pushed out to show people how the game works and what to expect.
DISCUSSION
I warned you we were going to talk about tax - specifically VAT and IOSS, the Import One Stop Shop.
But let’s start with some basics, because understanding these is key to understanding what’s going on and if, like me, you’ve been trying to get your head around this stuff, it can be frustrating that everyone seems to assume that you already know the basics when, in fact, most people don’t.
Let’s start with VAT. VAT is Value Added Tax. It’s what’s called a “poll tax”, in that everyone pays it at the same rate, regardless of income. VAT is levied on purchased goods and services - usually on goods and services that are deemed by the government to be non-essentials or, as they are often termed, “luxuries”.
We live in a vastly inter-connected world, but still inside the artificially-created geographical bubbles called “countries”. And this presents us with the first challenge to understanding VAT, because different countries charge VAT at different rates and on different goods. What one country considers a luxury might be considered an essential in another. This is particularly the case when dealing in foodstuffs, but has controversially also been an issue with tampons and other “feminine hygiene” goods which are patently essential but treated by many countries as luxuries.
The other thing that makes VAT complicated is that governments want to be able to collect it, obviously enough. Now, if I go out of my house and down the road to a local game store, like Incom Gaming, say, and buy a set of minis, it’s relatively simple.
When Incom bought those minis, they paid VAT for them, which they recorded. They then charge the VAT on to me, which I pay as part of the price of the minis. That VAT is then paid by Incom to HM Revenue & Customs, who then give back to Incom - in the form of a tax rebate - the VAT that Incom themselves paid.
Because retailers typically buy at a discount on the RRP, the amount of VAT they pay - and then have back as a rebate - is less than the VAT that I paid on the retail value of those minis.
This should make sure that HMRC is always receiving more VAT revenue than they are paying back to companies in rebates. Ergo, the government makes money.
But this gets complicated if, instead of buying from Incom, I buy the product online from a company based in, let’s say… France. Because now I, in England, have bought a product on which I have paid VAT, but that VAT has been paid in France, whereas I am in England. So HMRC has enjoyed a net zero income from that transaction. If a product, once shipping is added on, can be bought cheaper in France than it can in England, there is no logical reason for me to buy it anywhere but France.
Thus, businesses don’t bother to sell products that can be acquired cheaper overseas.
Of course, one way to address this is with customs duty: a fee on the import of goods from overseas. Customs duty is basically there to persuade people to “buy local” by making it more expensive to do otherwise. But customs fees are subject to all sorts of complicated international agreements and frameworks that mean that many products - including the ones most associated with our hobby - aren’t subject to customs duty.
Governments have limited ability to influence what goods are and aren’t subject to customs… but they can very much decide what is and isn’t subject to VAT. And the argument goes that VAT should be payable at the point where the transaction is completed - i.e. in the chair of the customer at their laptop - not at the point where it is fulfilled - in the business premises in France, in this case.
No government wants less tax income, so unsurprisingly there is international consensus that VAT should be chargeable at the point of sale.
And so we come, at last, to IOSS and the EU’s new rules.
Basically, in order to not interfere too much with small enterprise, the EU has long permitted the movement of goods bought at retail across borders without charging local fees as long as the value was below €22 - no VAT, not customs.
Of course, in principle you had paid VAT. You paid it, though, at the point of fulfilment, not at the point of sale.
But where there’s a loophole, there’s a way to manipulate that loophole to avoid vast sums of tax. Goods could easily be moved across borders unobtrusively if they were shown as being worth less than €22. And huge quantities of apparently low-value products were moved - particularly from the former Soviet Union and China - into the EU. And once they were in the EU, with a paper trail to show that all their taxes were properly paid, there was effectively no limit to where they could be shipped at whatever value, without being subject to further taxation.
The situation enabled all kinds of money laundering, drug shipments, human trafficking and worse by abusing a system intended to help out legitimate small businesses - just like so many businesses in our industry.
In response, the EU elected to end the €22 exemption.
That, by the way, is pretty much it. For purchases over the limit there has been absolutely no change whatsoever. All the same rules still apply. And those rules mean that if I, in the UK, buy a product from a seller in France, I am obliged to pay VAT on that product at the rate charged not by the French government, but the one charged by the UK government. And the seller from whom I am buying it must, therefore, pay that VAT rate value to the UK government.
Paying taxes to a government in whose territory you don’t abide can seem counter-intuitive. But you are, by international consensus, conducting business in that country by accepting online sales from that country. But when this involves sending reports to a foreign government whose language you may not understand and whose tax systems may therefore seem all the more confusing and intimidating, it can obviously make businesses inclined to simply decide not to sell overseas at all.
This, of course, is bad for the business, bad for international peace and stability and bad for customers. So the EU’s solution is IOSS.
In order to ease the burden of dealing with VAT payments in other countries that most small businesses find too complicated and intimidating, the EU has set up the Import One-Stop Shop, which is a way for businesses to report all of the VAT owed on all of the sales made into the EU by businesses outside the EU.
You have to register to use the service and I won’t pretend that it’s intuitive. But it’s available in multiple languages and allows businesses to make a single report for all the twenty-seven member states of the EU, which is a lot easier than making separate reports to each state you sell into.
‘But hang on!’ I hear small business owners cry… In fact, Bernard? Why don’t you do this bit.
<Hang on! I’ve been selling goods to countries all over the world for years and I’ve never had to make a VAT report to any of them. Why do I have to start now?>
Trick question! You don’t!
If you don’t charge VAT at the local rate on your sales and you don’t pay the VAT owed on the goods then your customer on the receiving end will be liable to pay that VAT - in addition to the VAT they’ve already paid on the goods - when they receive the product you shipped to them. But there is a huge difference between a customer being liable to pay and a customer actually being asked to pay.
The more valuable a product appears to be - and the more securely it is shipped - the more likely the end receiver is to get a bill on unpaid VAT and/or duty. But anyone who orders small-value goods from overseas will know that it’s a lottery whether you actually get your shipment appraised for VAT owed.
Collecting VAT carries a cost to the government, so the payoff of the collection has to be proportionate to the cost of collecting it. The fact that the law permits the EU to levy this charge on all imports doesn’t automatically mean that they will do so.
If you are routinely shipping goods overseas of a high enough value that your customers are going to be routinely charged VAT, then you ought to have a high enough profit margin that you can afford the inconvenience of registering to pay VAT in those various territories and be able to tailor your website so that folks can indicate where they are shopping, to ensure the correct rate of VAT is charged.
IOSS is just a way of reducing the cost and inconvenience of doing that.
And if you can’t afford it or don’t want to afford it, the other option is to sell through and OLM - that’s an Online Marketplace to you and me. eBay, Etsy, Amazon and even Patreon are all considered to be OLMs. Wargame Vault is an OLM. If you sell through an OLM then the obligation of charging the correct rates of VAT and paying that money to its respective governments belongs to the OLM not the merchant. Of course, the OLM takes their cut for providing you with this service, but it doesn’t half reduce the faff.
Of course, the real kicker is on those businesses that are kind of around the middle: they’re too small to easily be able to pay the fees associated with international VAT registration, but they’re too large to want to be giving up a slice of their profits to an OLM.
But to those businesses I would point out that IOSS is still making the basic obligations on your business easier, not harder. And if you weren’t already engaged with those obligations, there’s really nothing compelling you to engage with them now. You just have to be aware that they are out there, be prepared for them to occasionally bite you - or, more properly, bite your customers who get unexpected bills to take receipts of goods they thought they’d already paid for.
If you find that this is a problem for you, then it’s time to do things right.
If not, you don’t need to lose sleep over it.
And for the customers who are supporting these businesses, you just need to appreciate that you may get the occasional unexpected bill. If you’re not prepared to pay it, don’t order goods from overseas. Don’t be a dick and turn away a shipment because of an unexpected VAT bill, but by all means let the retailer know that you got one. It will help them to know whether it’s time to get professional help to make their website more international-friendly and get their tax affairs more in order.
There. I hope that was enough tax talk for one episode. Let’s talk about Kill Team.
<break>
Now it has to said immediately that I’ve not played the new Kill Team, not least because no one has outside the GW development team at time of recording. It’s not been released yet. But as I’ve said before, GW is nailing its marketing strategy these days, and they are leaking snippets about how the game plays and, my word, folks are doing the analysis already.
I don’t plan to re-hash what others have already gone over while the game remains behind locked doors, but I would certainly like to get my hands on the rules once it’s out. Inevitably, it’ll be launched with a limited run boxed set of Orks and Astra Militum, and the new minis are pretty tasty, but that’s not what we’re interested in, here at Precinct Omega. No, what we want to know is how it plays. So once it drops, I’ll see what I can do about getting my hands on a copy of the rules to do my usual read-through and analysis. But for now, and without going into the detail, let’s talk about what we do know.
The most important thing to note about the new Kill Team rules is that, unlike previous disappointing iterations of the 40k skirmish concept, they aren’t derived directly from the core 40k rules. Rather, they have been built from scratch.
The other thing to note is that GW is learning. Not only have they been watching other small miniatures manufacturers to learn from the free R&D of manufacturing and design, but they’ve also been looking at the work of other game developers and learning from them.
Inevitably this has led to a split camp in the fan community with some people accusing GW of being derivative and copy-pasting other companies’ rules, while others are giving thanks that GW has finally noticed that game design has evolved in the last thirty years. I fall comfortably into the latter camp. It looks like the game will involve an integrated turn of some sort, with special circumstances permitting the limited activation of multiple characters simultaneously.
Characters also have their own, unique statline. Not unique like Zero Dark in that you can make it up with tools you’re given, though. Unique as in not just being another version of Weapon Skill, Ballistic Skill etc. But there is an element of customization in that each character will have access to a choice of “paths” that unlock additional abilities. The term “path” also implies a meaningful experience track for campaign play, too, although there’s nothing official been said on that subject.
The crucial thing that hasn’t been addressed, yet, is how well the new game will accommodate conversions. With the popularity of Inq28 and its various incarnations, it seems to me impossible that GW can’t have noticed that their fans would like to field their own, unique creations legitimately in a rules-set without having to make laborious “counts as” mental gymnastics. However, I’m not holding out great hopes for this. GW wants, more than anything else, for people to buy minis. Remember: they aren’t a games company and every game they write - even the good ones - are only there to persuade you to buy more miniatures. So any game that encourages players to dust off old favourites or to put good use to the endless piles of surplus bits they already own isn’t one that is serving GW’s best interests.
Rather, Kill Team will be treated as a gateway game - one that will persuade you to buy great-looking new boxed sets of various veteran and character-led plastics as a first step towards expanding that one squad into your next army. Looking backwards just isn’t GW’s way.
Still, perhaps I’ll be surprised.
When the rules drop, I’ll see if I can get hold of a copy. Who knows? Perhaps GW might even learn another lesson from their unpaid R&D teams and give them away for free?
<Ho. Ho. Ho.>
<break>
And finally, with no particular connection to either of the previous two pieces except that it’s news and it interests me, let’s talk about Overdrive.
First, Overdrive is so like Aristeia in its concept that it’s almost embarrassing. I mean, sure, Kings of War was like Warhammer Fantasy and Warpath was like 40k and Dreadball was like Bloodbowl and Armada is like Man O’ War and Dwarf Kings Hold was like Warhammer Quest, and Star Saga was like Space Hulk, but…
OK, look, I’m not saying that Mantic Games can only produce derivative games. In fact, all of their games that I’ve had any proper experience of have consistently shown an imaginative and innovative approach to the execution of their concept. But I am saying that it’s probably time for Mantic to step up again.
They did it with Deadzone, after all, and they’ve done good work with their intellectual property licences for Mars Attacks and The Walking Dead, so I know they have it within them. They are high enough profile that it would be good to see Mantic stop reacting to Games Workshop and to start showing them what to do.
Oh, and there’s Overdrive.
To the best that I can recall, GW has never done a sci-fi arena combat boardgame. But Corvus Belli, of course, has. Their 2018 game, Aristeia!, has had modest but consistent success that I suspect will only pick up with the end of lockdown. It’s a terrific game, even if I’m just not clever enough to be any good at it.
So will people who didn’t buy Aristeia! buy Overdrive instead? Let’s break it down.
It’s a boardgame played with three miniatures on each side that are drafted from the available selection - a selection that is starting with, I think, six characters but which is certain to expand. You pick a “play mode” which is really a mission or scenario, like “King of the Hill” or “Capture the Flag”. I mean, I used to play Halo online and I enjoyed King of the Hill and Capture the Flag, but they were just different ways of doing the same thing, so I think Mantic is exaggerating the extent to which these scenarios really expand the game’s replayability. Also, everything I just said could be said about Aristeia.
Other than that, then, it’s a hex based game… it has d6s… and unique plastic minis…
Yes, the resemblances to Aristeia keep stacking up. But it doesn’t use custom d6s, which is a plus. More than that, too, they use the “exploding dice” mechanic in which any roll of a 6 lets you roll another dice. Although I’m not a rabid fan of exploding dice, it’s a popular mechanic that can be used effectively in a range of scenarios. And the minis are big, chunky boys, too - each one occupies three hexes, rather than one - part of the background for Overdrive is that it’s the arena sport for the creatures and heroes too big or too dangerous to play in the already-lethal world of Dreadball.
And, as I reported a couple of weeks ago, Overdrive is going straight to retail, without Mantic relying on a Kickstarter campaign to generate FOMO and push sales.
The question, as far as I’m concerned, is whether this is a game that’s going to offer anything substantially different, in terms of a tabletop experience, from Aristeia! Is there any reason why someone would choose Overdrive over its more mature competitor? Or is there anything you might get from Overdrive that you wouldn’t from Aristeia!?
Because the game’s not out yet, I could sit on the fence and say “well, it’s too early to say”. And I really, really do want to be fair to Mantic, because I have a lot of time for them as a business. But…
Based on the “How To Play…” videos that have been released, the articles they’ve published and the other official content that’s already out there, I have to say that my gut feeling is that there’s nothing in this game that makes it a substantially different experience to Aristeia! Tactically, it looks slightly less interesting, and aesthetically it can’t seem to decide how seriously it wants to take itself. That said, if you’re already invested in Dreadball and haven’t bought Aristeia! yet, then maybe you’d prefer to go with a familiar setting. Or if you’ve not even heard of Aristeia! before, well, you might pick up Overdrive if you want to get in on the ground floor with a game. Or, if you’ve tried Aristeia! and just found it a bit too much of a fiddly experience, maybe the slightly lower time to table on Overdrive will tick your boxes.
Of course, Mantic is free to send me a review copy if they want me to revise that opinion.
PRECINCT OMEGA
It’s worth ‘fessing up now that I’m working on a sportsball game for Precinct Omega.
If you’ve looked at my website, you might have seen the Ballmonsters, and the accompanying beta rules for the game of fiendish bouncing monsters. Well, the reason that game never got beyond the beta was that it just never quite… gelled for me. It was a failure of design. But I still own the miniatures and the intellectual property, so I’m not going to let it go and, eventually, there will be a Precinct Omega fantasy sportsball game for Ballmonsters. It’s pencilled into my design plan for late 2025, so don’t hold your breath.
But, if nothing else, Overdrive is a reminder that getting a fully-realized miniatures boardgame to market is a big capital investment and Mantic are absolutely to be applauded for it. The fact that I can see Privateer Press just finishing up yet another Kickstarter for Warcaster tells me that Mantic has clearly overtaken Privateer in the stakes of who gets to be the second largest miniatures wargaming company in the world. The gap between silver and gold is so vast that Games Workshop might as well be playing an entirely different game, admittedly. But Mantic isn’t just releasing a new game, with Overdrive. They’re sending a message.
And it’s a message that small aspirants like me would do well to heed. It says “look how long we had to work to get to this point”. So while I still have my plans for Ballmonsters, I’ll certainly need to think carefully about how I got about getting the game to market if I’m going to be competing in the same sphere.
<No pun intended>
And I’ll also need to make sure that my game, when it’s finished, offers something more than just miniatures to clearly distinguish it from the alternatives.
And speaking of distinction from the alternatives, what about this Kill Team thing, then, eh? With this dangerously new innovative approach to game design, GW is muscling in on my territory. Clearly I’ve got them scared with my few thousand pounds worth of annual revenue!
In all seriousness, Kill Team is a bigger threat to me than Stargrave ever was, even though I’m competing more directly with Osprey than I am with GW. The independent market for sci-fi and fantasy wargames basically relies on GW to draw people into the hobby and then tries to gently ease a few of them away with tempting morsels. And while GW’s games have been pretty dull wargaming experiences that’s been a predictably achievable prospect.
If GW starts to write games that are actually built upon trying to evoke the experience of warfare in the Dark Millennium, rather than just crude tools to sell plastic soldiers, the indy market could face its greatest challenge in a generation.
Oh, and before I go, I should talk once more about bloody tax.
For the record, Precinct Omega isn’t registering for IOSS. The vast majority of my sales are made through an OLM - Wargame Vault. My retail operation, meanwhile, is small fry and does very little overseas trade. But I am planning on winding that part of my business down anyway. It deserves and requires far more time than I can really commit to it if I’m also going to sustain the media side of Precinct Omega and keep writing new games and supplements. So watch out for a bit of a clearance sale coming up if you like 6mm sci-fi or just want some cool 28mm robots for your Zero Dark teams.
Meanwhile, if you order from me and you’re outside the UK, well, just bear in mind that you may get an extra bill for VAT from your government.
NEXT WEEK
I am so looking forward to getting back to gaming!
I like a solo game, of course, but I miss my local clubs. And while they’ve been meeting for a few weeks, I’ve been holding off on darkening their doors until I felt it was safe and reasonable. I set a fairly arbitrary date for that - which was Monday 9th August - quite a while ago and, so far, I see no reason to push that back at all.
But I can’t just, like, go back! I need a plan! I need to know what games I’m going to commit to play over the next 12 months. And while I could just play my own games, well, that’s not how you learn to be a better designer. So I need to think about what games I can commit to enough that I can paint the minis, learn the rules and throw myself into the play experience in order, as a designer, to get the most value out of the experience.
So I thought it would be fun to talk about what I look for in a game to motivate me to make that sort of commitment, what features I will be looking for, what games, therefore, I’m going to commit to and what I hope to get out of my time spent on each one.
And to discuss that, I’ll see you again… next week.
