David Singleton's Diary

Top Reasons not to become a music manager

According to our captain, the world is currently flying by at 900 km per hour, en route from Dusseldorf to Vienna. A chance to post recent photographs of Krakow and Essen.

The last notes of Schizoid Man in Krakow:

The crowd at the end:

And the crowd at the end of Essen:

Robert’s recent comments about the effect of Brexit (or more accurately the unknown nature of a future relationship) on next year’s touring plans have apparently made the national newspapers here. Personally, I find myself wrestling more with the current relationship. Top reasons not to become a music manager:

1) Banking Laws

2) VAT - the European version of sales tax.

Current banking laws (to prevent money laundering) mean that without the expense of a bank account in each country (which would need a fixed local trading address – and we are often only in each country for three days) we cannot legally take credit card transactions. So we are forced into cash sales. Except that there is a limit to how much cash you can take out of each country. Nor are you allowed to pay it into your own Euro bank account, as it is based in a different country. Nor, in some countries are you allowed to spend it, as they have now imposed a limit to cash transactions.

For all its absurdity, this is however a minor pimple of inconvenience compared to:

Value Added Tax. One of the joys of the EU, for those who support it, is that we have freedom of movement, and we can bring our joyful caravan to eleven different countries with relative ease.  And we are allowed to sell merchandise (without which no tour could be financed). Just as French market traders can, for example, bring their wares to our markets in the UK. Except (a big except) that as soon as you sell even one euro of goods in Austria, for example, you should legally complete endless forms to register for Austrian VAT, and commit to sending tax returns to the Austrian government. Or eleven different governments in our case. Even if you are nowhere near their own internal VAT threshold, or are only in each country for four days.

This madness actually began several years ago, when the EU changed the VAT law on downloads so that, rather than being taxed in the country of the seller, they are now taxed in the country of the buyer. This means that on downloads, we have to charge VAT at twenty-eight different rates (part of the reason for building the new DGMLive site). And every three months, we have to complete a form, and pay (on the last return) 0.6 euros to Hungary (about 70 cents), 0.8 euros to Portugal and the huge sum of 2.7 euros (all of 3 dollars) to Poland. The time and cost of administering this system is vast compared with the pitiful sums involved. There is, heavens be praised, at least an online portal where all such payments can be made.

When we began selling the Royal Packages in Europe, we had innocently assumed that the same system would apply – as indeed did the government ‘s own tax advisers. But no! Although it is the same VAT, being paid to the same European governments, you cannot use the same online portal. That would be much too sensible. For online ticket sales, you must fully register with each country, and deal with them directly. So it is costing us more than £1000 per territory (or £10 for every ticket we sold)  just to register, before we actually pay any tax. And then we either have to pay to unregister, or continue paying fees to send zero returns for no sales every quarter.

And that is before we consider Norway (one of the fates that may await us in Brexit-land). As Norway is not in the EU, we have to import all our merchandise into Norway (paying roughly 35% fee on T-shirts). Which means that we are going to have to unload all our merchandise from the trucks before crossing the border, decide how much we need in Norway, and send the rest on a new truck to be stored and await us in Amsterdam. Aaaagh!

Gavin tells me that, in his days with Porcupine Tree, before they crossed the Canadian border from the USA, they would hire a cheap motel room, ram it full of all the merchandise they didn’t need, and then pick it up again on the way back.

If this seems incredibly tedious and boring – you are absolutely right. It is incredibly tedious and boring. How did life come to this?! These rules were invented because countries became obsessed with getting their share of the tax income from iTunes, Amazon et al – but there seems to have been no thought whatsoever to how this might affect a Small, Mobile, and perhaps Unintelligent business (see below).

A light aside:

I had a lunch meeting with a manager of two large international acts who I was hoping might have pearls of wisdom over these issues (he didn’t, as at their level they have representatives in. every territory). As I described the twin problems above – we are forced to sell everything in cash, and then have great difficulty in legally declaring everything for tax - I could see his eyebrows raising and this worldly stare wondering “and why exactly do you think there is a problem?!”

A second aside :

There are stories (possibly apocryphal) that when U2 tour in the USA, they take so much cash in merchandise that they pay for someone from the Federal reserve bank to travel with them. He counts the cash at the end of each night, writes the bank a cheque, and then burns the cash, taking it permanently out of circulation.

Enough! The fine museums of Vienna beckon with their promise of kisses from Klimt.