UK VAT Rises to 20%

[Fbone]

http://www.bbc.co.uk/news/business-12099638

Rate increased from 17.5% to 20%.

Has anyone noticed if the ebook prices have increased this week?

How would a tax increase work with agency pricing?

[HarryT]

It's the retailer who adds the VAT. I suspect that few people are going to notice a 2.1% price increase; if an eBook previously sold for £5 then it will now cost £5.11, for example. An 11p difference is probably not going to prevent someone from buying a book.

[murraypaul]

I'm still seeing a lot of X.99 prices on Amazon.co.uk, including Agency books, so either Amazon are eating the VAT increase, or the agreements include a way for the increase to be split between Amazon and the publisher.

[HarryT]

Yes, a lot of retailers do seem to be taking the hit on their own margins, rather than raising prices.

[James_Wilde]

Talking of VAT which now is beginning to approach the levels of income tax, is there anyone else here who remembers that once upon a time the discussion around taxes concerned whether one should tax income or expenses. That debate is long dead. Now one is taxed when one earns the income and again when one spends it.

[CommonReader]

In Germany we even pay tax on a tax as we pay VAT on the fuel tax.

[mr ploppy]

The price for the wireless Kindle has gone up £2, but the ebooks I looked at seem to be the same price. Could they be using the same 15% VAT rate that Ebay uses? (I forget which country it is). The requirement for digital products is that they charge VAT in a European country, it doesn't say which one.

[Sweetpea]

Originally Posted by CommonReader

In Germany we even pay tax on a tax as we pay VAT on the fuel tax.

So do we, and the tax on fuel has risen, so, the VAT has risen as well ...

Originally Posted by James_Wilde

Talking of VAT which now is beginning to approach the levels of income tax,

Hmm, income tax here is at least twice as high as VAT...

It's time Europe will allow the low VAT on ebooks, the same as on books...

[HarryT]

No, Amazon UK definitely charge the UK VAT rate on their books. There are two possibilities:

1. They haven't yet updated the Kindle Store to reflect the new rate.
2. They're absorbing the increase themselves.

[t-town]

you should see if VAT isn't applied when you try to order. because, when shipping to other countries, the vat-rate of that EU-country is applied and not the VAT of the UK.

[boxcorner]

"Amazon.co.uk is required by law to collect VAT on orders for goods (including e-Books) dispatched to most countries within the European Union. For EU customers outside of the UK, amounts of VAT charged are in accordance with the local legislation in each country."

"In the UK, the VAT rate is 0% on a number of select items, including books ..."

amazon.co.uk: VAT on Goods

Directgov: VAT basics for consumers

[DMSmillie]

However, for ebooks:

"Note: under EU VAT legislation certain Books items (such as audio books and e-Books) are not eligible for reduced-rate VAT and in those cases the standard VAT rate will apply."

VAT on Sales by Amazon.co.uk for EU customers outside the UK

[HarryT]

Originally Posted by boxcorner

"Amazon.co.uk is required by law to collect VAT on orders for goods (including e-Books) dispatched to most countries within the European Union. For EU customers outside of the UK, amounts of VAT charged are in accordance with the local legislation in each country."

"In the UK, the VAT rate is 0% on a number of select items, including books ..."

amazon.co.uk: VAT on Goods

Directgov: VAT basics for consumers

Books, yes, but not eBooks. Under the EU's e-commerce VAT directive, downloads of digital items such as MP3 files and eBooks are required to be charged the full rate of VAT.

[Mike L]

Just to clarify ...

None of this discussion applies to printed books - only e-books. In the UK, printed books (and magazines and newspapers) have always had a VAT rate of 0%, and still do.