This page captures the compliance picture for the designer marketplace — the phase in which designers publish, earn royalties on, and are paid for the kits sold under their designs. The marketplace is a later phase of the platform, and the obligations on this page engage when the marketplace launches and not before; until then, gallery publishing without monetisation is the only marketplace-style surface. The marketplace introduces a stack of layered regulatory regimes that all hinge on one consequential analytical question — the seller-of-record characterisation — and the page is organised around that question and the regimes that flow from it. The most material analytical question at marketplace launch is the resolution of seller-of-record status, because its answer flips the scope of platform-operator reporting under European Union and United Kingdom rules, engages or disengages United Kingdom royalty withholding tax, and determines the principal-versus-agent posture under Financial Reporting Standard 102 section 23. The question is closed with tax-advisor opinion before any designer is onboarded.
The default designer-payout split is structurally ambiguous under United Kingdom Value-Added Tax and can take three forms. Under the Avvyland-as-principal model, the designer assigns or licenses intellectual property to Avvyland Limited and the company manufactures and sells; Avvyland Limited invoices the customer for the full kit price at the standard twenty-per-cent rate of Value-Added Tax, the designer invoices Avvyland Limited for their share, and if the designer is Value-Added Tax-registered that invoice also carries Value-Added Tax which Avvyland Limited reclaims, leaving the net Value-Added Tax to His Majesty's Revenue and Customs calculated on the retained margin. United Kingdom royalty withholding tax may engage on the designer payout under this model. Under the Avvyland-as-agent model, the designer is the seller of record and Avvyland Limited collects payment as agent and remits the designer's share net of commission; the designer invoices the customer, Avvyland Limited invoices the designer for the commission as a service, and Avvyland Limited's output Value-Added Tax is on the commission only. Under the deemed-supplier model — where Avvyland Limited operates an "online marketplace" under section 47A of the Value Added Tax Act 1994 and the designer is non-United Kingdom-established — Avvyland Limited is treated as both buyer (at zero rate from the designer) and seller (at the standard rate to the consumer); the statutory deemed-supplier rule overrides the commercial contract.
The default working position — subject to tax-advisor confirmation — leans strongly to the principal model for United Kingdom-resident designers and the deemed-supplier model for non-United Kingdom designers, because the practical application design carries the hallmarks of a principal: single Avvyland branding, single customer account, Avvyland-handled returns and warranty, Avvyland-held inventory, and Avvyland-borne chargeback risk.
The designer agreement structures the intellectual-property relationship and the resulting tax characterisation. The default contracting position is the second row of the table below: the designer assigns intellectual property on first publication of a design and is paid the sales-derived royalty on each kit sold incorporating that design. This default engages royalty withholding tax for non-United Kingdom designers unless treaty relief is obtained. The marketplace payout surfaces — creator monetisation, royalty settings, Stripe Connect onboarding, payout dashboards — stay disabled until the marketplace launch gates are met, and gallery publishing in earlier phases does not expose royalty controls or payout onboarding.
| Structure | Value-Added Tax model | Royalty withholding | Designer's tax position |
|---|---|---|---|
| Full intellectual-property assignment with a one-off purchase price | Principal | Not engaged | Capital gains |
| Intellectual-property assignment on publication with sales-derived royalty | Principal | Engaged | Income |
| Exclusive licence | Principal | Engaged | Income |
| Non-exclusive licence | Principal or agent | Engaged | Income |
| Service contract (work-for-hire) | Service supply | Not engaged | Trading income |
The European Union "DAC7" Directive (2021/514) and the corresponding United Kingdom Platform Operators (Due Diligence and Reporting Requirements) Regulations 2023 require platform operators to report sellers of relevant goods or services. Scope is conditional on the seller-of-record characterisation: under the principal model — Avvyland Limited selling its own product — DAC7 and the United Kingdom regulations are unlikely to engage because the company is not facilitating third-party-seller-to-consumer transactions; under the agent model the regulations clearly apply; and under the deemed-supplier model the underlying economic flow (designer to consumer, facilitated by the platform) typically still triggers reporting. Tax-advisor confirmation is required to lock the conclusion.
A designer is an excluded seller when fewer than thirty relevant activities and less than €2,000 of consideration occur in the reporting period. Other excluded categories include government entities, listed entities, and large-scale accommodation operators (not relevant to the platform). When a designer is reportable, the platform collects and reports the legal name and trading name, the primary address, every taxpayer-identification number and the issuing jurisdiction, the Value-Added Tax registration number where available, the date of birth or business registration number, the financial-account identifier (typically the international bank-account number), the total quarterly consideration paid or credited, the number of relevant activities per quarter, and any fees, commissions, and taxes withheld. The annual report is submitted to His Majesty's Revenue and Customs by 31 January following the calendar reportable period in the published Extensible Markup Language schema; His Majesty's Revenue and Customs then exchanges with treaty partners. Before the first reporting period, the platform pre-notifies through the online service.
When the platform makes a payment that is a royalty to a person whose usual place of abode is outside the United Kingdom, United Kingdom income tax is withheld at source at twenty per cent under sections 906 to 909 of the Income Tax Act 2007. Royalties broadly cover patent, copyright, design, model, plan, secret formula, trademark, brand names, and know-how, and failure to withhold makes the platform personally liable for the unpaid amount.
Whether a particular designer payout is a royalty turns on the contract structure. A one-off assignment purchase price is characterised as a sale and is not a royalty. The default — sales-derived per-kit payment under an assignment-on-publication — is a recurring royalty. An exclusive or non-exclusive licence paid as a percentage of derived sales is a royalty. A retainer or employment relationship is employment income with no royalty withholding, although it carries the employer-payroll obligations through the Employer of Record. Treaty relief reduces or eliminates the twenty-per-cent rate but is not automatic. The platform applies through His Majesty's Revenue and Customs' Double Taxation: Treaty Relief at Source for Companies process before paying gross: the platform submits the recipient's residency certificate, His Majesty's Revenue and Customs issues a clearance (a "Notice of Direction") confirming the reduced rate, and the platform then withholds at the reduced rate on future payments — often zero per cent for treaty-protected jurisdictions. Without a Notice of Direction the platform withholds at twenty per cent and the recipient claims a refund directly from His Majesty's Revenue and Customs, but the recipient's cash flow suffers.
Indicative treaty rates, re-verified per recipient, are summarised below.
| Recipient jurisdiction | Indicative withholding rate | Notes |
|---|---|---|
| United States | Zero per cent | With a W-8BEN-E from the United States recipient and the Direct-Trial process |
| France | Zero per cent | With a treaty certificate |
| Germany | Zero per cent | |
| Ireland | Zero per cent | |
| India | Ten or fifteen per cent | Depending on the type of royalty |
| China | Ten per cent |
Withheld tax is paid to His Majesty's Revenue and Customs and reported through the CT61 quarterly return. Reporting periods are calendar quarters; the return and payment are due fourteen days after the end of the quarter; the form lists each royalty payment, recipient, gross amount, and tax withheld; and annual reconciliation runs on the company tax return.
Under Financial Reporting Standard 102 section 23 — revised in 2024 to align with International Financial Reporting Standard 15's five-step model — the principal-versus-agent analysis determines whether the platform recognises revenue at the gross consumer price or at the net amount retained. Under the principal model the platform recognises revenue at the gross customer price and the designer payouts are an expense. Under the agent model the platform recognises revenue only on the commission. Under the deemed-supplier model the principal-versus-agent test under Financial Reporting Standard 102 is fact-specific and may produce a different result from the Value-Added Tax deemed-supplier rule. Tax-advisor confirmation locks the policy.
Designer onboarding uses Stripe Connect Express. Account creation runs through Stripe-hosted Know Your Customer flows for identity verification, residency verification, and banking. The charge type is either "Direct charges" with an application_fee_amount representing the platform commission, or "Destination charges" with a transfer to the connected account. Stripe performs the identity verification per local rules, Strong Customer Authentication on European Union transactions runs through the Payment Services Directive (PSD2), Stripe handles payouts to the designer's bank account, and foreign-exchange conversion runs through Stripe's published rates.
Each designer onboarded through Stripe Connect Express provides legal name and trading name, primary residential or registered address, date of birth (for an individual) or business registration number (for an entity), taxpayer-identification numbers and issuing jurisdictions, Value-Added Tax registration number where available, bank account (international bank-account number), trade-register entry (for an entity), self-certification of European Union law compliance, the appropriate United States tax form (W-8BEN-E for non-United States designers and W-9 for United States residents) for any payouts that touch United States tax, the treaty residency certificate for royalty withholding relief, and the signed intellectual-property assignment or licence agreement. The onboarding flow blocks payout until the appropriate tax form is collected, and a missing form triggers backup withholding at twenty-four per cent on United States-tax-touching payouts under section 3406 of the Internal Revenue Code.
For United States-resident designers receiving payments through Stripe Connect, Stripe (as a third-party settlement organisation) issues the Internal Revenue Service Form 1099-K to designers crossing the federal threshold. After the One Big Beautiful Bill Act of 2025 the threshold reverted to $20,000 gross and more than two hundred transactions per payee per calendar year; the transitional lower thresholds for 2024 and 2025 were repealed. Some states (the District of Columbia, Massachusetts, Maryland, and Vermont) maintain lower thresholds, and Stripe handles state-specific 1099-K issuance for United States-resident designers through the Stripe Connect onboarding flow. The platform itself is not the 1099-K issuer; Stripe is. The platform's responsibility is to collect W-9 forms from United States-resident designers and to apply backup withholding where the form is missing.
The European Union Digital Services Act (Regulation 2022/2065) imposes several obligations on the marketplace surface. The platform does not have a European Union establishment, so Article 13 requires that, before the marketplace launches in any European Union member state, the platform designates a legal representative established in a member state where services are offered, authorised in writing to act on behalf of the platform for compliance and enforcement purposes, jointly liable with the platform for non-compliance, and notified to the Digital Services Coordinator of the member state of establishment. The representative's name and contact details are published on the platform's online interface, and a typical service-provider bundle covers the Digital Services Act representative, the European Union Artificial Intelligence Act Article 22 representative, and the General Data Protection Regulation Article 27 representative simultaneously.
Article 30 requires the platform, as an online platform allowing trader-to-consumer contracts, to obtain from each trader (designer) before allowing them to use the service: the name, address, telephone, and email; the trade-register registration and identity document; the bank-account details; and the self-certification of compliance with European Union law. This data substantially overlaps with the platform-operator reporting data, so a single onboarding schema satisfies both regimes. Article 16 notice-and-action procedures already operate on the gallery and extend in the marketplace phase to cover designer-published content; notices are received electronically, acknowledged without undue delay, and processed in a timely, diligent, non-arbitrary, and objective manner. Article 17 statements-of-reasons are issued on takedown or restriction.
Article 19 exempts online platforms that qualify as micro or small enterprises under European Commission Recommendation 2003/361/EC (fewer than fifty employees and turnover or balance sheet not exceeding ten million euros) from a substantial subset of Section 4 obligations: internal complaint-handling under Article 20, out-of-court dispute settlement under Article 21, trusted-flagger handling under Article 22, abusive-notice measures under Article 23, and transparency reporting under Article 24 when below Very Large Online Platform scale. The platform qualifies at marketplace launch and is unlikely to push above the threshold immediately; the exemption applies as long as the platform stays below the threshold and expires on the first day of the second consecutive year the company exceeds it. Hosting-service obligations under Articles 14, 16, 17, and 18 and the Article 30 trader-transparency obligations are not exempt and apply regardless of size.
Regulation (European Union) 2019/1150 ("P2B") imposes transparency and fairness obligations on online intermediation services, and the platform's marketplace is in scope because the regulation applies extraterritorially. The obligations are plain-and-intelligible terms and conditions for business users, fifteen-day notice before any unilateral change to terms and conditions, ranking transparency with the main parameters disclosed in the terms, differentiated-treatment disclosure where the platform advantages its own offerings over designers' offerings, and account restriction or termination only with specific reasons and a thirty-day notice. Article 12 exempts small enterprises (the same European Commission Recommendation threshold as the Digital Services Act) from the internal complaint-handling system under Article 11 and the mediator-designation requirement under Article 12. The platform qualifies at marketplace launch, and the watchlist flags readiness for Article 11 and Article 12 as the company approaches the threshold.
In the marketplace phase, the platform may itself qualify as a "marketplace facilitator" under various United States state definitions. Where it does, the state sales-tax collection obligation shifts to the platform in every state where the platform has economic nexus — even on designer-driven sales. A state-by-state analysis runs with United States state-tax-advisor support, and United States sales-tax automation (Avalara, TaxJar, or Stripe Tax) is activated and configured for marketplace-facilitator mode before the first marketplace sale in the United States.
The Money Laundering Regulations 2017 high-value-dealer registration trigger is set at ten thousand euros or more in cash transactions. The marketplace operates through Stripe Connect with no cash, so the trigger is not engaged. Although the regulations do not themselves require Know Your Customer for designers, the platform-operator reporting and Stripe Connect Know Your Customer data-collection operationally function as Know Your Customer.
The audit log records every marketplace event: designer onboarding (Stripe Connect Know Your Customer completion plus agreement signing), Know Your Customer data collection, W-8BEN-E or W-9 collection, treaty-clearance receipt, payouts (gross amount, withholding amount, net amount, currency), CT61 quarterly filings, platform-operator reporting Know Your Customer collection and the annual report submission, Digital Services Act notices and actions and statements-of-reasons, fifteen-day terms-and-conditions change notices, designer account restrictions and terminations with the thirty-day notice trail, the Digital Services Act legal representative designation, and the European Union Digital Services Coordinator notification.
Before the marketplace goes live, the following items are confirmed: the seller-of-record characterisation locked through tax-advisor and intellectual-property-counsel opinion; the designer agreement template drafted; platform-operator reporting readiness with the Extensible Markup Language schema implementation and pre-notification submission (conditional on the chosen model); the Digital Services Act Article 13 legal representative designated and notified, which is a hard blocker for the European Union portion of the launch; the Article 30 trader-information collection wired into the designer onboarding flow; W-8BEN-E and W-9 collection wired into Stripe Connect Express onboarding; the treaty-clearance application template and process for non-United Kingdom designers; the CT61 quarterly filing process; Stripe Connect Express activation and Know Your Customer testing; United States sales-tax automation activation and the per-state marketplace-facilitator analysis; the marketplace-specific terms and conditions including platform-to-business obligations; and the designer Know Your Customer schema.