In this post, we’re going to discuss the improvements we made to our products to deal with the breaking changes introduced by PHP 8.2, as well as the possible issues that you might encounter. If you’re not familiar with the PHP programming languages and the technical aspects of WordPress and WooCommerce, we recommend to involve your developer to fully understand the topics we will cover.
The WordCamp Vienna 2022 was amazing
The WordCamp EU 2022 is around the corner. We can’t wait to meet our fellow colleagues in person and share experiences, opinions and suggestions. It will be an amazing event!
On a smaller scale, Vienna held its annual WordCamp a few months ago, on the 23rd of April. In its modesty, it was a successful event, with an excellent attendance. Proof below!
It was great to be able to meet other WordPress professionals in person, in this beautiful city, and listen to the many interesting talks by the participating speakers.
We got a surprise, thanks to Elementor
During the WordCamp, we met the Elementor Team, who invited us to participate to a raffle to win a subscription to their Elementor Cloud solution. I (Diego Zanella, Aelia’s founder) am not very lucky, and I rarely won anything. This time, I listened to the kind words of Angel Zinsel and I decide to give it ago. When the time came to call the winners, I was surprised to hear my name as the last one called. I honestly thought I heard it wrong, but my daughter “woke me up”. With a surprised face, hidden by the usual Covid mask, I walked on stage to collect my prize.
In case anyone wonders, I’m the one on the far right, with the concealed, confused face. 😅
I would like to personally thank the Elementor Team for the opportunity, the fun (and somewhat embarrassing) time and, of course, for the free licence for the Elementor Cloud. It will be useful to test future integrations and extend our solutions for maximum compatibility. 👍
Are you coming to the WordCamp EU 2022? Get in touch!
If you’re participating to the WordCamp EU 2022, please drop us a line: https://aelia.co/contact. You can meet Diego in all its “splendor” (LOL 😆) and chat about opportunities, experiences, and find the answer to life, to the universe and everything (spoiler: it’s 42). See you in Porto!
Mit freundlichen Grüßen aus Wien
Product-Addons by Plugin Republic, now with multi-currency support
A few days ago we have received excellent news from Gareth Harris, founder of Plugin Republic, which we are happy to share with you. Their popular Product Add-ons plugin now includes native support for our Aelia Currency Switcher. Without further do, here’s the announcement, straight from Gareth:
Version 3.9.5 of WooCommerce Product Add-Ons by Plugin Republic now includes full integration with Aelia Currency Switcher for WooCommerce. This means that you can display prices for your add-on fields in different currencies.
The integration is seamless: you don’t need to change any settings, it works straight out of the box. When your users switch between currencies, all the add-on prices will automatically update. Any items that the user has already added to their cart will also update.
You can get a copy of Add-Ons Ultimate from https://pluginrepublic.com/wordpress-plugins/woocommerce-product-add-ons-ultimate/.
We’re excited to see another developer joining the “multi-currency movement”, in an effort to offer owners of WooCommerce shops maximum pricing flexibility. We recommend to give Gareth’s plugin a try, it could be just what you need to manage addons and options for your products. If you have any questions, please feel free to contact him: https://pluginrepublic.com/support/. He will be happy to answer your questions and assist you with the configuration of multi-currency addons on your site.
Of course, if you have any questions for us, you can also reach out, by using our contact form: https://aelia.co/contact. Just drop us a line, we are always happy to assist you.
The Aelia Team
In this post, we will describe our updated plans for the Aelia EU VAT Assistant, and our recommendation on a solution to comply with the new VAT regulations introduced by the UK and the EU, which affect the taxation of physical goods sold to customers in the EU, UK and Norway. Due to the complexity of the subject, the article is somewhat long, therefore we prepared a summary for your convenience, which you can find below:
- Aelia established a collaboration with David Anderson, founder of Simba Hosting and author of popular plugins such as Updraft Plus. They offer a comprehensive, fully tested solution, called WooCommerce EU/UK VAT / IVA Compliance, which offers an extensive feature set. It covers all the aspects handled by the EU VAT Assistant does, as well as the new regulations that came into effect in January and July 2021. From now on, Aelia will recommend WooCommerce EU/UK VAT / IVA Compliance as a solution for VAT compliance.
- We decided not to release our own version of a VAT compliance product to cover regulations for UK and OSS, which affect physical goods.
- We will offer an optional data migration service to users who wish to convert the data stored by the EU VAT Assistant to the format used by the WooCommerce EU/UK VAT / IVA Compliance plugin.
- We extended the lifespan of the EU VAT Assistant, in its current form, to the 30th of June, 2022. This is to give our users sufficient time to migrate to the solution from David Anderson, or to another solution for your choice.
Below you can find more details about this decision, and our recommendations to keep your shop running smoothly.
We developed the EU VAT Assistant in 2014, and it was meant as a solution for internal use, to help us comply with the EU VAT MOSS regulations for digital products that would come into effect in 2015. At the time, there wasn’t a solution ready. We came into contact with David Anderson, founder of Simba Hosting, who was facing the same challenge, and we discussed the possibility to develop a plugin together, to help the owners of a WooCommerce shop complying with the new regulations. Although the plan didn’t go through, we remained in contact with David all these years, and we helped each other with the development of our respective solutions.
In 2015, we noticed the turmoil caused by the new regulations. Several analyses, performed by independent sources, indicated that the average cost to update an e-commerce for compliance with the VAT MOSS regulations would be around 10.000 (ten thousand) Euro. That would have been prohibitive for small and medium merchants, therefore we decided to make our EU VAT Assistant available to the public. Back then, we had three possible choices:
- Release the EU VAT Assistant exclusively as a paid plugin, like the Aelia Currency Switcher, Aelia Tax Display by Country, and our other plugins.
- Release the EU VAT Assistant as “freemium” plugin. That is, offer a free solution, with a basic set of features, and a paid solution, with a comprehensive set of features.
- Release the EU VAT Assistant as a free plugin, with all the features included, and fund its development and maintenance costs by selling premium support plans.
We evaluated each option, prepared plans for each one and made some projections in terms of potential cost and revenue. In the end, we decided to go with the 3rd option. We released the EU VAT Assistant as a free plugin, without restrictions or limitations, and encouraged our users to support its development by buying a paid support plan.
The challenge we faced
Our calculations indicated that, for the business plan to be sustainable, we would have had to reach a minimum “critical mass” of recurring revenue in no more than a year to be able to keep maintaining our plugin. We calculated that we needed at least a certain percentage of paying users to cover the cost introduced by the whole user base. Such a percentage was fairly low, and it seemed reasonable that we would have been able to reach. Other companies follow a similar model, and they charge between 50 to 60 Euro for every single support request, therefore we saw our pricing as competitive, and thought it would give us an additional edge. In short, it all sounded like a viable plan.
Unfortunately, even our worst case scenario forecast turned out to be too optimistic. The revenue from paying users has been dramatically lower than our most pessimistic forecast, and way too low to cover even the basic development and maintenance cost for the EU VAT Assistant. Based on our original business plan, we should have retired the plugin back in 2016, when it became clear that the product was severely underperforming. However, rather than just “pulling the plug” on it, we tried different strategies to increase the revenue. Unfortunately, they didn’t work, either.
The reason why we have been able to keep the EU VAT Assistant available for free was that we used the revenue generated by other projects to cover the running cost for our VAT solution. Although that was meant to be a temporary solution, we have been doing that for more than seven years. The year 2021 brought several important changes, and we had to review our plans accordingly.
The changes in 2021
It feels as if 2021 started yesterday and, yet, it’s already gone. Besides the “usual” news about the COVID pandemic, this year brought two important changes to the world of e-commerce:
- Brexit came into effect on the 1st of January, 2021.
- The new EU VAT OSS regulations, which affect the distance sales of physical goods, came into effect on the 1st of July, 2021.
These events introduced several changes in how an e-commerce would have to handle VAT. Amongst the most important, we can list the following:
- The UK left the VIES service for the validation of VAT numbers. UK VAT numbers now have to be validated using a dedicated service.
- The UK introduced a rule to apply a VAT exemption for consignments shipped from outside the UK, when their value is above 135 GBP.
- The EU introduced a “place of supply” rule to calculate VAT for physical goods.
- Similarly to the UK, the EU introduced a rule to apply a VAT exemption for consignments shipped from outside the EU, when their value is above 150 EUR.
As mentioned earlier, we developed the EU VAT Assistant for our internal use, and specifically to comply with the EU VAT MOSS regulations that affect the sales of digital products. Although the new rules may seem straightforward, from a human perspective, they introduce changes to reporting, filing of returns, and other ancillary aspects.
Our original plan for 2021 – Brexit
At the end of 2020, we announced the development of an addon for the EU VAT Assistant, to handle the changes introduced by Brexit. Amongst the other features, the addon would have added the possibility to validate UK VAT numbers. The addon required a lot of hard work to implement, especially due to the complicated logic required at the time by the online services provided by the HMRC Revenue and Customs. We launched a Beta of the UK Addon in January 2021, and made it available to selected users, to test the validation and VAT exemption of UK VAT numbers.
Soon after the release of the addon’s Beta, we reviewed our plan and we realised that, from a business perspective, we were again on the wrong track. The EU VAT Assistant still generated the bulk of the development and maintenance work, without bringing in sufficient revenue to cover them. Around the same time, we received the news about the VAT OSS regulations, coming into force in July 2021, which apply to the sales of physical goods. As an EU business that only deals with digital products, we weren’t aware of them.
Our second plan for 2021 – Brexit and EU VAT OSS
After reviewing the list of features required to cover Brexit and the VAT OSS, we came to the conclusion that we had to change our business model, to make it viable. We needed to find a way to deal with the existing maintenance cost, which we have been covering ourselves until now, as well as the development and maintenance of all the new features for Brexit and VAT OSS. We scrapped the idea of addons, which introduced additional complexity and made the pricing complicated, and decided that it would be a better option to replace the EU VAT Assistant with a new solution. The new plugin would be exclusively premium (i.e. paid), and include all the features needed to comply with the original VAT MOSS regulations, the new VAT OSS and Brexit. As a stop gap solution, we also provided a couple of workarounds that can be used to get closer to compliance with the OSS regulations while using the existing EU VAT Assistant.
The development of the new VAT solution proceeded through the year, although slower than expected. This was due to a series of events, some of which outside of our control, as well as the fact that we had to prioritise several large projects for our customers. During the development, we kept in touch with the authors of other VAT solutions, to share opinions and check if we were going in the right direction.
An unforeseen challenge
The conversations with other developers were productive, and brought to light a gap in our process. The new regulations from the UK and the EU are complex, and they may change in the future. However, we’re not accountants, nor tax advisors. Taxation is not our field of expertise. We don’t have staff dedicated to that area, and our solutions are not vetted or audited by a Revenue Office. Due to this, there could be regulations of which we are not aware. Just like we didn’t know about the VAT OSS coming into effect in July 2021, we also didn’t know about Norway’s VOEC scheme, which came into effect in April 2021.
It became clear to us that, before we could claim that we have a solution to help complying with the new regulations for the UK, the EU, Norway and, possibly, other countries, we would have to fill this gap. To do so, we would need to bring on board someone with the required expertise on international tax compliance, up to speed with each new regulation. The investment would be significant, and that would reflect upon the price tag of our new premium solution. That price would become higher than initially planned and, most likely, out of reach for most of our existing user base.
Our new plans
After reviewing all the information at hand, we realised that our new product would not be competitive. There are other VAT compliance plugins available, which already offer the features we were working on, at a much lower price than what we could possibly offer. Due to that, our conclusion is that the best course of action for our users would be to switch to one of the existing solutions and, eventually, migrate the existing data from the EU VAT Assistant to the new one. As of December 2021, we are no longer planning to release a OSS VAT compliance solution and we put its development on hold.
Our recommendation for OSS compliance
If you’re using the Aelia EU VAT Assistant, and you need a plugin to help you with the compliance with the VAT OSS regulations, Brexit, or Norway’s VOEC Scheme, we recommend to switch to the WooCommerce EU/UK VAT / IVA Compliance. Its author is is David Anderson, founder of Simba Hosting and author of the popular Updraft Plugins backup plugin. We worked together on a common VAT compliance solution in 2014, before we went to develop the EU VAT Assistant. We kept in contact with David since then, exchanging opinions and suggestions on how to improve our respective solutions. Having seen his VAT plugin at work, we can vouch for its quality. If you have any questions about his product, you can reach David via the Simba Hosting website: https://www.simbahosting.co.uk/s3/contact/.
Need to migrate the EU VAT Assistant data? We can help!
We are planning to offer a migration service to convert the data stored by the EU VAT Assistant into the format used by the WooCommerce EU/UK VAT / IVA Compliance plugin. This would be a once-off operation, which we can schedule at a time convenient to you. After the migration, we can help you removing the extra data from the database, as well as the EU VAT Assistant, so that you can keep using the WooCommerce EU/UK VAT / IVA Compliance plugin instead. If you wish to avail of that service, please contact us and we will get back to you with a plan and an estimate for the migration.
What are the plans for the existing EU VAT Assistant?
We will keep the EU VAT Assistant available, in its current form, until the 30 June 2022. The plugin will keep working as it does now. We will keep testing it against the new version of WooCommerce up until the retirement date. You can keep using the plugin for now, but we would encourage you to switch to the WooCommerce EU/UK VAT / IVA Compliance in due time, to ensure that you can keep collecting VAT information.
We would like to thank you for having read this far. We’re aware that this is a long post, but we thought appropriate to give you a good overview of the reasons behind our decisions. If you have any questions, please feel free to reach us at any time: https://aelia.co/contact. We will be happy to give you any information you need.
The Aelia Team
We launched our new website, with a new look and new features
At the beginning of October 2021, we went live with a new website, completely redesigned. The work took significantly longer than we expected, but the important thing is that we finally made it. The new website has a more modern look, a colour scheme that’s easier on the eyes, and it’s also significantly faster. Our tests indicate that it’s up to 30% faster than the previous one, but we will still work to optimise it, to offer you the best experience.
In addition to the look, we made an important change to how we distribute our products. We partnered with our friends at Freemius, and moved all our solutions to their platform. From now on, the Freemius service will take care of handling sales, licensing and distribution for all the Aelia plugins, giving us more time to focus on improving the solution that our customers grew up to know and trust over the years.
The advantages for our visitors and customers
The series of improvements we applied to our site will bring significant advantages. It would take time to list every single change, therefore we prepared a short summary, for your convenience.
We improved the look of the website, using softer colours. This will make it easier to navigate the content and find the information you need. The new layout also includes better support for mobile devices. Mobile browsing is a key aspect of the Internet and, although most of our visitors and customers reach our site via a desktop, we wanted to cater to our “mobile friends” as well. As a further cosmetic touch, we replaced the old, ugly icons with much better ones.
We moved all our products to an external service, called Freemius, to offer you a better user experience, right from the moment you choose to purchase one of our solutions. To explain the reason behind this decision, we would like to share a bit of “background story”.
As soon as we launched our first premium product, the Aelia Currency Switcher for WooCommerce, we faced a challenge that turned out to be harder than we thought. It was 2013, and neither WordPress, nor WooCommerce offered a reliable, scalable solution to manage software licences and distribute updates for our products. We tested some of the available plugins, but none of them worked too well for us. In some cases, we even received a disgruntled response from the author of a plugin, when we asked about the feature set, so that was a clear roadblock.
Our first solution – The Aelia Licensing System
Due to the lack of a suitable solution, we opted to implement our own licensing system, starting from scratch. For the last couple of years, our Aelia Licensing System has been handling licences and serving automatic updates to thousands of our customers. This worked fine for us, until we had to face some important challenges:
- When we first designed our licensing system, we deliberately left renewals as a manual operation, because that was what our customers asked. That request changed fairly quickly, and nowadays most of our customers would like to have licences that renew automatically.
- Our customer base grew faster than we expected. Our in-house licensing system, which was still working fine, risked not to be able to handle all the traffic it received.
- An increasing number of our customers asked us to provide trial versions of our products. We are not fans of the idea of offering limited versions of plugins, that don’t reflect the true capabilities of the paid product, therefore we had to find a way to implement some sort of “time limited trial”.
- In 2021, Brexit finally became effective, introducing new rules to sell to UK consumers (i.e. customers who are not registered for VAT). Merchants are required to charge VAT to all UK customers who don’t have a valid UK VAT number. At the same time, the same merchants can’t charge VAT unless they have a UK VAT number, which we don’t have. Registering for VAT in the UK would have introduced a significant amount administrative costs, that we could not sustain. Due to that, the only viable option left to us was to block sales to UK consumers. Needless to say, this caused us to be unable to offer our products to such customers.
Our new choice – Freemius
With so many different aspects to handle, we realised that we could not longer rely on our own resources. Due to that, we tested the Freemius platform, and found that it allowed us to address all the above, automatically. Their service handles automatic renewals, is fast, and it can serve customers from the EU, the UK and abroad. This allows us to reach a broader audience, remain fully compliant with VAT regulations and save a significant amount of paperwork.
The Freemius platform offers our customers a modern, responsive and performing user interface. Thanks to that, our clients can find what they need, quickly and easily. On top of that, the work we did for the integration can also benefit our fellow developers!
If you’re a plugin developer interested in Freemius, we have something for you
The Freemius platform offers a simple integration guide. We could have just followed the instructions anded add a purchase link on our website, manually, on each product page. However, as Engineers, we like to automate these aspects, so we came up with a solution. We prepared a Freemius Integration plugin , which allows to link a WooCommerce shop to the Freemius service. Some of the key features:
- Manage product prices, from WooCommerce, and update them in Freemius automatically. This feature also works with WooCommerce’s variations to allow you to configure as many prices as you like, in any combination. For example, you can create monthly, annual, lifetime payment options, for one site, or multiple sites, and link each one to a variation.
- Manage and synchronise product prices in multiple currencies. The Freemius Integration is also fully compatible with our Aelia Currency Switcher. This feature allows you to synchronise, and keep up to date, the product prices all the currencies supported by Freemius. You can enter the prices manually, directly in WooCommerce. or let them be updated automatically whenever exchange rates change.
- Display a smart widget to allow your customers to purchase your products. You can use the shortcode provided by the Freemius Integration and let it take care of showing the available options, with each price, to your prospective customers. Simp
- ly drop the shortcode anywhere you like, and it will display a user friendly purchase interface to your customers.
If you wish to see the Freemius Integration in action, you can simply visit one of our product pages. You can find the purchase widget towards the bottom of the page, or simply click on the “buy plugin” button to scroll right down to it.
Interested in the Freemius Integration for WooCommerce?
If you would like to know more about the Freemius Integration for WooCommerce, please feel free to contact us. We will be happy to share more details about it, and collect your feedback and feature requests, in preparation for its release to the public.
Update – October 2021
Our products are now distributed via the Freemius platform, which can handle the sale of our products to UK customers who are not registered for VAT. If you are resident in the UK, you can browse our products and purchase them, without having to enter a VAT number.
Brexit – What’s new
After a long period of changes, negotiations and changes, the “infamous” Brexit will reach a major milestone. From the 1st of January 2021, the United Kingdom and connected countries and regions, such as the Isle of Man and Northern Ireland, will no longer be part of the EU. During the transition period, we kept in contact with several authorities, to ensure that we can remain compliant with the regulations that apply to the sale of our product and services to UK residents. Unfortunately, it was only in the last few weeks that we were given some clearer instructions on how we will have to proceed. Due to the new rules, we will have to make some changes to our sale policies. For convenience and brevity, we prepared a summary, which you can find below.
Changes from the 1st of January, 2021
From a customer’s, things will remain mostly the same, with a notable exception. The UK Revenue Office informed us that, since we deal exclusively in services, we will have to account for VAT on all our sales, regardless of the amount. Like it happens with intra-EU sales, we will have to make a distinction between sales to consumers and sales to businesses:
- Sales made to UK businesses, i.e. customers with a valid UK VAT number won’t have VAT applied to them. The buyer will account for VAT like they did, with the reverse charge mechanism.
- Sales made to UK consumers, i.e. customers without a valid UK VAT number, will be subject to the applicable VAT, like it happens now. Note: UK businesses who are not registered for VAT will be treated as consumers, in this scenario.
What described above is exactly what happened in the past, for intra-EU sales. An important difference is that, to charge VAT to UK consumers, we will need a UK VAT number. We already applied to get such number from the UK Revenue Office, but we haven’t received one yet.
How the changes might affect our customers
Unfortunately, without the UK VAT number, we can’t charge VAT to UK consumers. Still, the UK Revenue would ask us to pay them the applicable VAT, which we can’t collect. They suggested us to just increase prices, to “cover” for the VAT, but that is not feasible, as it could affect all other clients as well.
Due to this “wrinkle”, we had to take a difficult decision. Starting from the 1st of January 2021, we will no longer be able to sell our products to UK consumers. If you try to place an order with a UK billing address, you will be required to enter a valid VAT number to complete the purchase. This restriction will be in place until we will receive the necessary documentation from the UK Revenue Office, which will allow us to resume charging VAT to UK consumers. As of today, we don’t know how long that is going to take. The officer informed us that this registration process can take several weeks, and there isn’t much we can do to speed up the process.
Update – May 2021
Due to the additional administrative work required to have a UK VAT number and file the necessary returns, we opted not to register for VAT in the UK. Instead, we will move our products to an external platform, which will handle the VAT aspects on our behalf. We are aiming to have the migration completed by Q2 2021. After that, UK customers who are not registered for VAT will be able to buy our products.
We are aware that this is an unpleasant change, unfortunately we couldn’t find another viable alternative. The whole Brexit process has been chaotic and poorly managed for everyone involved. We will do our best to resume normal operations as soon as we can. In the meantime, if you have any question, please feel free to contact us. We will be happy to answer your queries.
The Aelia Team