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

[pdurrant]

Originally Posted by JSWolf

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

Amazon are not doing anything illegal. Nor are they doing anything dishonest. They are just charging a higher price than another retailer.

[stumped]

Originally Posted by pdurrant

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.

i understand that,. I could not find amazon's VAT figures so I used Corp tax as a proxy.- to illustrate what tiny proportions of their business figures get allocated to UK.

VAT avoidance via creative accounting is an art form in Europe ( and a $50Bn bonanza for fraudsters) *
I bet amazon pay next to no vat. They will have lots of UK VAT receipted purchases ( warehouses, fork lift trucks) but hardly any sales because those are booked via off shore entities.
check the small print on your last amazon invoice for which entity sold you that item.

* your average UK self employed/small business man knows how its done, VAT receipts for the car, the wife's car, all the tools, petrol...then x% of work done for cash in hand. VAT returns show a tasty annual refund due...
The first thing most householders ask tradesmen, after seeing a quote, is " how much for cash"

old data but 1st quote I found:
HMRC has estimated that UK taxpayers have lost £1bn-£1.5bn in 2015-16 as a result of VAT fraud,

[2haven]

I just bought a an ebook from the Google play store and they are still charging VAT.

Thank you for your payment
You bought a book on Google Play.

Order number: GPB.3115-9568-5195-61528
Order date: 01-May-2020 17:02:12 BST
Item Price
A Village Scandal (The Village Secrets, Book 2) £0.99
Digital Book Purchase
Total: £0.99
(Includes VAT of £0.16)

[pdurrant]

Originally Posted by stumped

i understand that,. I could not find amazon's VAT figures so I used Corp tax as a proxy.- to illustrate what tiny proportions of their business figures get allocated to UK.

You're right that Amazon ebook sales in the UK are from Luxembourg, so the VAT goes to Luxembourg, not the UK.

But physical goods originating in the UK are sold by the UK subsidiary (VAT # GB727255821), and the VAT from those sales goes to the UK government.

[stumped]

Originally Posted by 2haven

I just bought a an ebook from the Google play store and they are still charging VAT.

Thank you for your payment
You bought a book on Google Play.

Order number: GPB.3115-9568-5195-61528
Order date: 01-May-2020 17:02:12 BST
Item Price
A Village Scandal (The Village Secrets, Book 2) £0.99
Digital Book Purchase
Total: £0.99
(Includes VAT of £0.16)

I wonder if they also have that John Grisham book about the King of Torts.

Sue them?
Class action !!

[pdurrant]

Originally Posted by 2haven

I just bought a an ebook from the Google play store and they are still charging VAT.

Thank you for your payment
You bought a book on Google Play.

Order number: GPB.3115-9568-5195-61528
Order date: 01-May-2020 17:02:12 BST
Item Price
A Village Scandal (The Village Secrets, Book 2) £0.99
Digital Book Purchase
Total: £0.99
(Includes VAT of £0.16)

That's certainly invalid, but I do have some sympathy, as the UK government only announced the change yesterday. I expect that Google will fix it retrospectively and probably give a refund of the VAT.

[Quoth]

Originally Posted by pdurrant

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.

Yes, also on the KDP pricing page, you set the TOTAL retail price for each Market place. Amazon calculates the VAT exclusive price (which is NOT just the EU and GB will not be ditching VAT, just not sending part of it to EU), the royalty, the "delivery charge" (I hope is just for Mobile?) and the "royalty".

Amazon's Corporate Tax bill is unrelated to VAT collection. There has never been any suggestion of VAT fraud. Sky was doing dodgy stuff, in Ireland they charged IRISH VAT on installs, but sent all VAT on Irish subscriptions to the UK VAT people.
VAT Carousel Fraud is quite a different thing.
Also historically Amazon was putting all retail profit into acquisitions and building datacentres, both tax deductible expenditures. Now they are doing avoidance on AWS profits. That's nothing to do with VAT.

The publisher set price includes VAT or Tax at whatever rate it is. IMO the publisher should not be setting retail price, but a cost to Amazon, then Amazon should charge whatever they want. The supplier pricing model for all "esales" seems broken and a throw back to before the 1960s when makers set retail prices. That's illegal now for physical products. They set a price to the retailer, not the customer.

[j.p.s]

Originally Posted by pdurrant

You're right that Amazon ebook sales in the UK are from Luxembourg, so the VAT goes to Luxembourg, not the UK.

But physical goods originating in the UK are sold by the UK subsidiary (VAT # GB727255821), and the VAT from those sales goes to the UK government.

How do geo-restrictions to publishing rights play into this?

Are typical contracts EU wide or country by country?

If the UK is now out of the EU, does that complicate selling "from Luxembourg"?

[JSWolf]

Originally Posted by stumped

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

That was there before just like a search for Kindle eBooks still shows Includes VAT. Sure the publisher set the price. £6.66 is the price the publisher set because when VAT is added it becomes £7.99. So this should not be a publisher set price issue as the price was already set. Thing is, Amazon needs to say why the prices have not changed even though VAT is no more. All it does is look like Amazon is cheating customers. And I thinkt hey are.

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

I mean if this is say a software issue, then Amazon needs to say so and allow people who buy eBooks get get refunded the difference.

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

If you have eBooks on your wish list, they should ALL flag as being cheaper. You don't have to know about DRM or convertion to know you are getting ripped-off/cheated. All you need to know is that no VAT equals cheaper and if it's not cheaper, then you are not getting it for the VAT free price you should be getting it.

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

Amazon themselves should be alerting people who have eBooks on their wish list about the price drop. But they won't because in most cases, there won't be price drops.

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

Yes, I did check Kobo and they have botched no VAT as well.

[JSWolf]

Originally Posted by 2haven

I just bought a an ebook from the Google play store and they are still charging VAT.

Thank you for your payment
You bought a book on Google Play.

Order number: GPB.3115-9568-5195-61528
Order date: 01-May-2020 17:02:12 BST
Item Price
A Village Scandal (The Village Secrets, Book 2) £0.99
Digital Book Purchase
Total: £0.99
(Includes VAT of £0.16)

Same eBook at ebooks.com is £0.83.

[JSWolf]

Originally Posted by pdurrant

You're right that Amazon ebook sales in the UK are from Luxembourg, so the VAT goes to Luxembourg, not the UK.

But physical goods originating in the UK are sold by the UK subsidiary (VAT # GB727255821), and the VAT from those sales goes to the UK government.

Does this mean that Amazon won't be having lower eBook prices? Customers won't know that Amazon's VAT is not UK. All they will care about is that prices have not gone down. If it
s true that Amazon's VAT is not UK VAT then Amazon will have to eat the VAT or piss off a lot of customers.

[stumped]

I looked for the guardian article that yesterday predicted Amazon books would be cheaper. I found the article but Was hoping to find readers comments but failed( often the case with guardian, sometimes there are excellent comments , sometimes they are missing. ) Was hoping to see lots of oh no they aren't....

[stumped]

The contracts between Amazon and publishers set the minimum price that the retail customer must pay.

Think of it as price fixing, because it's a legal version of that.

Does not only apply to books. A company selling high end fashion, or hifi, will contractually force retailers not to discount below a set floor

So Amazon has agreed contractually to sell book X for £Y.
Changes to vat do not affect that contract. If vat had gone up, to say 30%, Amazon could / should still have sold for £Y, that's the deal they made.

I don't like it any more than you do. If you want to organise a no win no fee class action, sign me up

[JSWolf]

Originally Posted by stumped

The contracts between Amazon and publishers set the minimum price that the retail customer must pay.

Think of it as price fixing, because it's a legal version of that.

Does not only apply to books. A company selling high end fashion, or hifi, will contractually force retailers not to discount below a set floor

So Amazon has agreed contractually to sell book X for £Y.
Changes to vat do not affect that contract. If vat had gone up, to say 30%, Amazon could / should still have sold for £Y, that's the deal they made.

I don't like it any more than you do. If you want to organise a no win no fee class action, sign me up

There is a solution to the problem. Buy from ebooks.com, strip the DRM and convert to KF8. In my case, I wouldn't have to covert.

[JSWolf]

Amazon needs come out with why VAT free does not mean a lower price in most cases. Then Amazon needs to do something about it so VAT free does mean a lower price.