UK ebooks VAT 20%->0% 1st May 2020

[pdurrant]

Originally Posted by JSWolf

When you do a search, the results still says includes VAT and that's no legal. The idea was to make eBooks cheaper and that's not happening.

I agree that the text still appears in search results. But since the prices DO include VAT. 0% VAT.

(There's a technical difference between being exempt from VAT and attracting 0% VAT.)

There's an oddity with my PD books on KDP. I just went and adjusted the UK price to £0.77 in the UK, but all three are now showing as free. I don't why that's happened.

[JSWolf]

Why are prices not lower due to no longer having to charge at on eBooks?

[JSWolf]

Originally Posted by pdurrant

I agree that the text still appears in search results. But since the prices DO include VAT. 0% VAT.

Yesterday I was looking at an eBook that was £7.99 with 20% VAT. Now with 0% VAt, the same eBook is still £7.99. Why is that? Why are customers being cheated?

[stumped]

Originally Posted by JSWolf

Why are prices not lower due to no longer having to charge at on eBooks?

because....capitalism

PS to all, another great feature of VAT is that criminals extract €50Billion per annum from that designed-by-committee wonder tax

I doubt that's possible with USA sales tax

and hey-ho, not our (UK) problem anymore

VAT fraud that involves goods crossing borders within the EU costs governments €50 billion per year, according to Pierre Moscovici, Commissioner for the EU’s Economic and Financial Affairs Taxation and Customs Division

[JSWolf]

In the US when we have a sales tax free day, prices are not raised because of no sales tax. Also, in a state such as New Hampshire where they don't have sales tax, prices are not higher to make up for no sales tax.

Is this a scam by the publishers? Is this a scam by the stores? Or is this a scam by both? But in any case, it is a scam.

[Pajamaman]

I've read through the posts, but I remain confused. So the UK government has suspended VAT charges on ebooks. However, the prices remain the same (on Amazon at least) for books where the price is set by the publisher.

Who collects VAT? Amazon, at the point of sale, or the publisher before the customer buys on Amazon?

If VAT is no longer charged by the government, then where is this still-charged percentage of the book price going? Confused.

This might just be a slow response to the VAT cut by Amazon or publishers. But even then, will customers receive a refund after this is sorted out. Double confused.

[sun surfer]

If this were a surprise I wonder if the prices are all still exactly the same because of the way Amazon and publishers have their system in place; i.e. if the system is that the publishers tell Amazon a set price regardless and neither side accounted yet for the possibility of a changing VAT, then maybe publishers just haven't had time yet to catch up and begin changing prices accordingly.

That doesn't mean they will eventually change them though. But with more notice and fanfare they may have been pressured to at least make token price drops upon the switch to assuage the eagle-eyed watchers.

[Daveoc64]

Originally Posted by Pajamaman

I've read through the posts, but I remain confused. So the UK government has suspended VAT charges on ebooks. However, the prices remain the same (on Amazon at least) for books where the price is set by the publisher.

Who collects VAT? Amazon, at the point of sale, or the publisher before the customer buys on Amazon?

If VAT is no longer charged by the government, then where is this still-charged percentage of the book price going? Confused.

This might just be a slow response to the VAT cut by Amazon or publishers. But even then, will customers receive a refund after this is sorted out. Double confused.

If something that includes VAT at the standard rate of 20% is on sale for £10, the VAT portion of that price is approximately £1.66. The shop keeps approximately £8.34.

If there is a change and VAT no longer applies to the product, the shop can either:

a) Reduce the advertised price of the product to £8.34, to reflect the elimination of VAT.

b) Keep the price at £10, and pocket the £1.66 that is no longer going to the government.

Many companies choose option b (or perhaps the unwritten option, where they increase the price for no reason!).

[JSWolf]

ebooks.com is selling the book I was looking at with no VAT.

https://www.ebooks.com/en-gb/searcha...settling+Stars

Amazon is selling it with VAT.

https://www.amazon.co.uk/Unsettling-.../dp/B07X2LBHVB

[stumped]

Originally Posted by Pajamaman

I've read through the posts, but I remain confused. So the UK government has suspended VAT charges on ebooks. However, the prices remain the same (on Amazon at least) for books where the price is set by the publisher.

Who collects VAT? Amazon, at the point of sale, or the publisher before the customer buys on Amazon?

If VAT is no longer charged by the government, then where is this still-charged percentage of the book price going? Confused.

This might just be a slow response to the VAT cut by Amazon or publishers. But even then, will customers receive a refund after this is sorted out. Double confused.

Every player in the chain has to calculate and report vat. It's a value added tax so it applies to what you sell for minus what you paid for it
If I buy something from you for £10 and sell it for £15 my value added is 5. If the guy who sold it to me for £10 made it for 8 his value added is 2.
As the saying goes, a camel is a horse designed by a comitttee. VAT is a euro-camel

[pdurrant]

Originally Posted by JSWolf

ebooks.com is selling the book I was looking at with no VAT.

https://www.ebooks.com/en-gb/searcha...settling+Stars

Amazon is selling it with VAT.

https://www.amazon.co.uk/Unsettling-.../dp/B07X2LBHVB

Amazon.co.uk is selling it for £7.99, the price they have to sell it for because of the contract they have with the publisher. They are not charging VAT. None of that purchase price will be paid to the government in Amazon's VAT bill.

Ebooks.com are selling it for £6.66, presumably because their contract with the publisher says that they're allowed to.

Given this, I would expect Amazon to be in talks with the publishers to get an agreement to a lower price.

Unless Amazon move on this, I'll certainly be considering buying ebooks elsewhere.

[stumped]

bear in mind also, that Amazon, like many multinationals are structured so that they make no, or very little profit in the Uk. no profit - no tax , so probably no VAT.
Plus, there's a reason why they shipped those CDs & DVDs to you from Amazon Jersey, and why so much stuff is booked via Amazon ( republic of ) Ireland.
They will have an army off accountants figuring out how to offset all the VAT from amazon sales with VAT paid on amazons own purchases - desks, chairs, toilet rolls. The only cost is the accountants payroll
e.g.
Amazon has revealed that its UK corporation tax bill almost halved to £4.5m last year, days after the US company posted a record profit of $2.5bn (£1.9bn) in its most recent quarter

[JSWolf]

Originally Posted by pdurrant

Amazon.co.uk is selling it for £7.99, the price they have to sell it for because of the contract they have with the publisher. They are not charging VAT. None of that purchase price will be paid to the government in Amazon's VAT bill.

Ebooks.com are selling it for £6.66, presumably because their contract with the publisher says that they're allowed to.

Given this, I would expect Amazon to be in talks with the publishers to get an agreement to a lower price.

Unless Amazon move on this, I'll certainly be considering buying ebooks elsewhere.

The Testaments by Margret Atwood (a different publisher)
ebooks.com - £8.33
Amazon - £9.99

Doctor Who: Star Tales
ebooks.com - £6.66
Amazon - £7.99

That's three different eBooks from three different publishers and this shows that Amazon are cheating customers where ebooks.com is playing fair.

[stumped]

Originally Posted by JSWolf

...

That's three different eBooks from three different companies and this shows that Amazon are cheating customers where ebooks.com is playing fair.

in all the amazon examples " this price was set by the publisher"
I think this shows that amazon never forsaw this and are in contracts which stop them matching the lower prices now appearing elsewhere

I expect a few lawyers at amazon are pulling all-nighters until it is sorted.

but will it make any noticeable blip in kindle sales & profits? I doubt it. most people are well indoctrinated with the " its cheaper at Amazon" mantra and do not stop to check before each new purchase
its not like there's a pop up in the Kindle store saying price alert - this is now 20% cheaper down the road.
and if you have a kindle reader, and don't subscribe to this forum to stay clued up on how to convert... where else are you going to shop for compatible books anyway

I don't even know of any price app that tracks book prices across retailers, yes there are some that tell you about amazon price drops, but none I know of that cater for today's situation

has anyone checked out he prices at Kobo UK, are they on the ball or sleepwalking through an opportunity ?

[pdurrant]

Originally Posted by stumped

bear in mind also, that Amazon, like many multinationals are structured so that they make no, or very little profit in the Uk. no profit - no tax , so probably no VAT.

This is just wrong. VAT bill due from amy business is precisely the difference between the amount of VAT collected from sales, and the amount of VAT paid out in purchases. It has nothing to do with corporation tax, which is a tax on profits.