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

[fjtorres]

Originally Posted by DNSB

I'd go with "With friends like these, who needs enemies?"

That would be if you look at from the Amazon competitor's point of view.

Amazon probably prefers the Nietzsche quote: "That which doesn't kill me makes me stronger." The current crisis being just one of many factors over the years.

Every time Amazon's biggest foes come up with a scheme to "destroy" them, Amazon ends up with less and less competitors and more and more revenue.

Like when B&N decided to drop Nook prices to near cost, even though their build cost was higher than the Kindle2. Amazon not only matched and undercut Nook, they introduced a cheaper reader with a better screen and used it to get into the advertising business that is by now a multibillion dollar business by itself. More profitable than books, too. And several dozen big electronics companies that were looking to get into the ereader business (Samsung, Acer, Asus, and many others) shook their heads and abandoned the US market and shortly afterwards tbe eink market altogether.

I can imagine the Adobe ADEPT program manager banging his forehead against the nearest wall.

[JSWolf]

But outside the US, ePub is the winner.

[pdurrant]

Originally Posted by JSWolf

But outside the US, ePub is the winner.

Not in the UK.

[pdurrant]

I thought people would be interested to here that Amazon have just sent out an email to KDP publishers informing them of the change in VAT, and the reduced minimum prices.

"Recently, the UK government changed Value Added Tax (VAT) rules in the United Kingdom. From 1 May 2020, the VAT rate applied to eBooks sold to customers in the UK dropped from 20% to 0%.

KDP reduced the minimum price of our royalty plans in the UK marketplace. From 1 May 2020, the new minimum list prices for books sold on Amazon.co.uk changed:
For the 70% royalty option, the minimum price reduced to £1.77.
For the 35% royalty option, the minimum price reduced to £0.77.
For the full list of changes, see our list price requirements.

To review your list price, go to your Bookshelf and choose the book you want to change."

So perhaps we'll see price changes from smaller publishers.

[JSWolf]

Why can't Amazon just tell the publishers that VAT is gone and prices will be set to reflect this and be done with it?

[murraypaul]

Originally Posted by JSWolf

Why can't Amazon just tell the publishers that VAT is gone and prices will be set to reflect this and be done with it?

Because the publishers set the price, and not Amazon.
Amazon UK have no right to change the price for agency ebooks.
UK VAT is included in the headline price, not added on at the checkout like US sales tax.
You know this.

[fjtorres]

Originally Posted by JSWolf

Why can't Amazon just tell the publishers that VAT is gone and prices will be set to reflect this and be done with it?

Because they don't have the power.
And because times are tough for publishers and some would prefer to pocket the extra money. People were buying the books at the old price so there is some reason to expect they'll keep on buying at that price. They might lose a few sales from the price-sensitive but publshers as a rule don't believe in price elasticity. They've said that over and over.

Amazon strong arming publishers would be illegal and Amazon is one outfit that *listens* to their lawyers. Besides, this is the UK. Amazon has an even bigger ebook market share than the US. That makes it even more important to stick to the letter of the law. And the contract.

[JSWolf]

The thing is, most UK Kindle users buy their eBooks from Amazon. There is no Overdrive for them. So, if Amazon were to say, cut the prices to show a VAT reduction or else go, I think the publishers would cave.

[j.p.s]

Originally Posted by pdurrant

I thought people would be interested to here that Amazon have just sent out an email to KDP publishers informing them of the change in VAT, and the reduced minimum prices.

"Recently, the UK government changed Value Added Tax (VAT) rules in the United Kingdom. From 1 May 2020, the VAT rate applied to eBooks sold to customers in the UK dropped from 20% to 0%.

OK, so it took amazon 2 months to react.

So perhaps we'll see price changes from smaller publishers.

I'm not in the UK, how have the larger publishers been responding (or not)?

[JSWolf]

Originally Posted by j.p.s

I'm not in the UK, how have the larger publishers been responding (or not)?

Some publishers at eBooks.com have their prices VAT reduced. At Amazon and Kobo, the prices are the same as if VAT was still being applied. That makes these publishers greedy !$"£&$(#

[pdurrant]

Originally Posted by j.p.s

I'm not in the UK, how have the larger publishers been responding (or not)?

Generally not, I think. But I haven't been paying really close attention, since I'm really only buying books that are on special offer at the moment, and they are still all £0.99 or so. (& Amazon have said that the £0.99 special offer pricing isn't going to go down.)

[shalym]

Originally Posted by JSWolf

The thing is, most UK Kindle users buy their eBooks from Amazon.

Saved for posterity.

Shari

[fjtorres]

Originally Posted by JSWolf

The thing is, most UK Kindle users buy their eBooks from Amazon. There is no Overdrive for them. So, if Amazon were to say, cut the prices to show a VAT reduction or else go, I think the publishers would cave.

No.
The publishers would call the competition authority.

https://www.gov.uk/government/organi...kets-authority

That would be textbook antitrust: Amazon using their market power to dictate *consumer* prices to publishers. It's also a violation of the agreed upon contracts.

Amazon isn't about to slit their own throat to save you a few coins.

[Canuck_in_Japan]

Is VAT already included in the price? I'm not sure why this is so hard. If a book is 7.99 then wouldn't it come out to 9.59 in the cart? So now a 7.99 book should be 7.99.

[pdurrant]

Originally Posted by Canuck_in_Japan

Is VAT already included in the price? I'm not sure why this is so hard. If a book is 7.99 then wouldn't it come out to 9.59 in the cart? So now a 7.99 book should be 7.99.

The price publishers set and the price displayed to consumers includes VAT. It's illegal in the EU to advertise products to consumers quoting a price without the VAT already included.

So no, a £9.99 book on Amazon UK used to be £8.33 + £1.66 VAT, but you'd only have seen that by looking closely at your receipt. The price on the website and in the cart at checkout would have been £9.99.

Now, that same book may well still be advertised as £9.99, but it'll be £9.99 + £0.00 VAT.

Or the publisher might decide to change the price to £8.49.