This means that if you sell £50 a year of knitting patterns you now have a liability to document the geography of your customers and prove that non are in other EU countries, OR pay tax to each country you sell to individually. HMRC are saying that companies (who may be individuals [sole traders in local parlance]) can not legally refuse to sell across EU borders to avoid this either. Along with that as you're now holding personal information on your customers there is a whole raft of new laws to attend including apparently a £35 registration with the UK Information Commissioners Office (ICO).
Foreigners already don't pay local VAT in the EU do they? This change is about sales to customers in the EU, there is no change AFAICT to transactions with customers not in the EU the VAT laws relevant to that are unaltered.
It's totally bonkers. The people involved have described "micro businesses" as selling < £2million GBP of digital services. They clearly haven't considered the impact on the many small businesses (now being termed nano businesses) that sell maybe a few thousand GBP of e-books or a few hundred pounds of knitting patterns or similar.
If it becomes feasible ($ wise), perhaps this then can be a new process implementation with lower (but feasible) margins.
If not feasible, then sales stop to the EU.
Note that in practice, you probably won't have to fear much as long as your revenue does not exceed a certain threshold. In Germany, for example, the "Bemessungsgrenze" is 17'500€, but I'm not sure if that also applies to your case.
Furthermore, you should also see the positive side: when for example renting dedicated servers from a German hoster, you won't have to pay VAT, so everything is 20% cheaper for you.