How to choose a platform for online editorial training courses

Thinking of creating and delivering online editorial training courses? Here’s some guidance for editors and proofreaders on the tax implications and choosing a platform.

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​What’s in this post …

• Your online course and the tax authority in your own jurisdiction
• Your online course and the tax authority in other jurisdictions
• Finding a taxation-friendly training platform
• Understanding Merchants of Record
• Where I host my editorial training courses
• Summing up: What to consider

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Your online course and the tax authority in your own jurisdiction

When we sell online training courses, we’re entering the world of digital services and products, as defined by the various tax authorities in jurisdictions all over the planet.

Not all digital services and products are created equally, and the rules in one country might be different in another. Even within a single jurisdiction, your online course might be treated differently in terms of tax depending on how you provide access to the content. 

 5 examples of online courses
Imagine you’re me, a UK resident offering online training courses. Here’s what the classifications might look like (though I’m no tax specialist) in 2022. 

Example 1
What the online editing training course comprises

• Pre-recorded videos
• Downloadable PDF booklet
• Downloadable Word practice exercises – self-assessed ​
  

Classification in UK

• Digital service​

VAT must be charged to UK customers?

• Yes

​Example 2
What the online editing training course comprises

• ​Livestreamed webinar
• Downloadable PDF booklet
• Downloadable Word practice exercises – self-assessed ​
  

Classification in UK

• Not a digital service

VAT must be charged to UK customers?

• No

​Example 3
What the online editing training course comprises

• Pre-recorded videos
• Downloadable PDF booklet
• Downloadable Word practice exercises – marked by tutor and manually emailed back to student​ ​
  

Classification in UK

• Probably not a digital service

VAT must be charged to UK customers?

• Probably no

​Example 4
What the online editing training course comprises

• ​15-minute 1:1 consultation with a live tutor 
• Pre-recorded videos
• Downloadable PDF booklet
• Downloadable Word practice exercises – self-assessed ​
  

Classification in UK

• Possibly not a digital service​

VAT must be charged to UK customers?

• Possibly no​

​Example 5
What the online editing training course comprises

• Live consultation with a tutor via a separate group forum space
• Pre-recorded videos
• Downloadable PDF booklet
• Downloadable Word practice exercises – self-assessed ​
  

Classification in UK

• Nebulous​

VAT must be charged to UK customers?

• Nebulous​

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Your online course and the tax authority in other jurisdictions

So you’ve worked out what the deal is for your own jurisdiction. However, when it comes to selling globally, where you live is irrelevant when it comes to consumption taxes like VAT.

Anyone offering online courses in a global market must know where their customer lives. And it’s the tax authority’s rules in the customer’s jurisdiction that determine whether we need to add a consumption tax to the price.

Which can be a monumental barrier for sole-trading editors and proofreaders. Why? because here's what we need to take responsibility for.

Our consumption tax responsibilities 
Small-business owners selling digital products and services internationally must have a mechanism in place to:
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• ensure that our customers provide the necessary jurisdiction data on our invoices
• allow our customers to exempt themselves from the tax where appropriate
• calculate the appropriate tax rate for every customer 
• review that tax rate regularly (because they change!)
• collect the tax from the customer
• remit the collected tax to every single relevant tax authority. That's right. Every single one.

That list is enough to deter any small-business owner from sharing their knowledge and charging for it. Which is a crying shame because the editorial community is passionate about training and CPD.

And the fact is that most of us don’t have the time or skills to do this work – unless we decide we're not actually going to be editors and trainers anymore, but full-time accountants instead.

Nor can we afford to hire an expensive specialist tax accountant who will do this for us – unless we want the entire exercise to become unprofitable.
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So what do we do?

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The solution: Find a taxation-friendly training platform

There is a solution. Training platforms are increasingly offering tax support to their trainers. When evaluating a training platform for its taxation-friendliness, it’s critical that we understand the concept of the Merchant of Record.

What is a Merchant of Record?
A Merchant of Record is the legal entity that usually:

• calculates the appropriate rate of tax that needs to be added to a purchase of your course
• updates that rate of tax rate in your payment gateway when necessary
• collects that tax from your customer
• remits it to the tax authority in the appropriate jurisdiction.

When we choose a training platform that acts as the Merchant of Record, or includes a third-party integration that does the same, that leaves us free to get on with the business of editorial training rather than worrying about whether we’re tax compliant in every part of the world we’re selling to.

If the platform doesn't offer that, we're the Merchants of Record, and the buck's back with us.

What’s on offer?
Some training platforms are partial Merchants of Record. PayHip, for example, calculates, collects and remits VAT in the UK and Europe for me as a UK resident. However, I’m responsible for the tax compliance in all other jurisdictions ... Cue the worry.

Some training platforms include integrations that calculate the tax but don’t collect or remit it. That’s on us or our (expensive) specialist tax accountants. LearnWorlds is an example. The Quaderno app calculates what we owe to whom, but we have to do the rest ... Cue the worry.

Some training platforms act as full Merchants of Record, meaning they calculate, collect and remit all the tax for all jurisdictions. Teachable is an example ... And relax!

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Where I host my editorial training courses

I now host my editorial training courses with Teachable for seven reasons:

• It acts as a full Merchant of Record, meaning I can focus on course creation rather than worrying about tax compliance.
• The platform is super user-friendly for me and my students.
• Teachable has a gorgeous app (iOS and Android), which is fantastic for students who want mobile access. Download it from your usual app store.
• I can brand my content appropriately.
• Multiple editorial trainers use Teachable, which means students can access our schools via a single platform.
• I can now offer payment plans that allow my students to spread the cost.
• And there's a bundles option that lets me offer you access to multiple courses ... and with big discounts!

Note that at the time of writing, trainers wanting to offer PayPal as a payment gateway in Teachable must set their course prices in US dollars.

Teachable is right for me, but any editor or proofreader embarking on online course creation should do their own research. Most platforms offer a free trial so you can get a feel for the setup, functionality and branding options.

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Summing up: What to consider

1. Creating and delivering online courses for editors and proofreaders has never been easier thanks to the growing number of platforms with user-friendly interfaces and multimedia functionality.
   
   
2. What’s not so easy is the tax-compliance element. Many of the providers haven’t yet woken up to the implications for small-business owners operating in a global marketplace with complex and ever-changing tax rules. 
   
   
3. If you’re planning to teach online, make sure you understand the differences in tax rules for courses with a live component and courses that are self-directed, not just in your own jurisdiction but elsewhere too. Also bear in mind that what constitutes live tutoring might be nebulous.
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4. And, finally, if you decide to head down the self-directed training route, and your preferred platform isn’t offering a full Merchant of Record service, think carefully about who’s going to do that work and how much it will cost. 

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Related resources

• Check out my courses
• Visit my Skills and training resource page to access free guidance. 
• Find out how to log in and access courses you've already purchased.

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About Louise Harnby

Louise Harnby is a line editor, copyeditor and proofreader who specializes in working with crime, mystery, suspense and thriller writers.

She is an Advanced Professional Member of the Chartered Institute of Editing and Proofreading (CIEP) and co-hosts The Editing Podcast.

• Get in touch: Louise Harnby | Crime Fiction & Thriller Editor
• Connect: X @LouiseHarnby, Facebook and LinkedIn
• Learn: Books and courses
• Discover: Resources for authors and editors​

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