Britain INCREASES tax on ebooks

garygibsonsf · 06-22-2010, 12:05 PM

In a fairly shock move discussed at the link below, the new 'emergency budget' raises VAT on ebooks (and also audiobooks) to 20%, which I'm sure will piss off many UK readers who frequent this forum, myself included.

http://www.thebookseller.com/news/12...off-books.html

GeoffC · 06-22-2010, 12:07 PM

What mean they by "could increase" - they really mean will increase ....

HarryT · 06-22-2010, 12:10 PM

This is a highly misleading announcement.

What has happened, in case anyone isn't aware, is that it today's budget the new government has announced that, from 4th Jan 2011, the VAT rate is going to rise from the current 17.5% to 20% (which is pretty much in line with the rest of the EU). Given that eBooks and audiobooks are subject to the standard rate of VAT, naturally they will also be charged VAT at 20%.

omk3 · 06-22-2010, 12:12 PM

It wasn't misleading, that was exactly what I got by reading it.
The real question is, why are ebooks and audiobooks still subject to vat when paper books aren't?

GeoffC · 06-22-2010, 12:13 PM

generally because it is classed as digital media ....

omk3 · 06-22-2010, 12:15 PM

sure, but it makes no sense to not reclassify them as books, because that's what they are after all, digital or not.

HarryT · 06-22-2010, 12:17 PM

Quote:

Originally Posted by omk3

It wasn't misleading, that was exactly what I got by reading it.
The real question is, why are ebooks and audiobooks still subject to vat when paper books aren't?

For the same reason they are everywhere else in the EU: the EU's eCommerce VAT directive requires them to be.

GeoffC · 06-22-2010, 12:19 PM

in other words Europe hasn't yet "gotten with the times .... "

omk3 · 06-22-2010, 12:20 PM

surprise surprise...

HarryT · 06-22-2010, 12:21 PM

Quote:

Originally Posted by GeoffC

in other words Europe hasn't yet "gotten with the times .... "

Downloaded items are classified for VAT purposes as "commerce" rather than "goods", and member nations are not permitted to have a reduced VAT rate for commerce, as can be done for goods.

Dopedangel · 06-22-2010, 12:40 PM

Quote:

Originally Posted by HarryT

Downloaded items are classified for VAT purposes as "commerce" rather than "goods", and member nations are not permitted to have a reduced VAT rate for commerce, as can be done for goods.

Well in someways I do agree with them taxing downloads. As physical books sold
their do provide some kind of work to the economy even if you buy from an online bookstore someone delivers it to you.
Where as an ebook can be downloaded anywhere in the world and money goes out of a country's economy completely.

Terisa de morgan · 06-22-2010, 12:52 PM

Quote:

Originally Posted by HarryT

Downloaded items are classified for VAT purposes as "commerce" rather than "goods", and member nations are not permitted to have a reduced VAT rate for commerce, as can be done for goods.

You can tell that to Spanish government

(they have to retire the change in VAT).

SpiderMatt · 06-22-2010, 01:42 PM

Quote:

Originally Posted by Dopedangel

Well in someways I do agree with them taxing downloads. As physical books sold their do provide some kind of work to the economy even if you buy from an online bookstore someone delivers it to you. Where as an ebook can be downloaded anywhere in the world and money goes out of a country's economy completely.

Except taxes raise the prices of goods and services. It's basically like telling someone they have to donate a certain amount of money to the state based on how much they consume. So the money for digital products still leaves the country's economy, you're just now required to give up additional money that goes to the state.

murraypaul · 06-22-2010, 01:51 PM

Quote:

Originally Posted by garygibsonsf

In a fairly shock move...

Huh? The VAT rise was the least shocking thing ever, it has been trailed in the news for days.

Kali Yuga · 06-22-2010, 02:29 PM

From what I'm hearing, raising VAT by 2.5% is going to be one of the least shocking of the upcoming changes in the UK. Public sector pay frozen, slashing govt spending by 25% almost completely across the board, capital gains tax increases... Y'all are gonna have LOTS of fun in October, when the full slate of taxes and cuts is announced.

I'm unclear on why books got an exemption from VAT in the first place, aside from their use by education. As such, I don't see why ebooks should automatically fall into a different category than any other digital purchases.

However, I find it rather amusing that an "ebook is just a book" whenever classifying it that way means a lower cost for the punters.

Of course, if a publisher says it's going to charge the same for an ebook as a paper book, mass hysteria ensues because "ebooks are not the same as books...."

06-22-2010, 12:05 PM	#1
garygibsonsf Addict Posts: 321 Karma: 432192 Join Date: Dec 2007 Location: Glasgow, Scotland Device: Amazon Kindle Paperwhite	Britain INCREASES tax on ebooks In a fairly shock move discussed at the link below, the new 'emergency budget' raises VAT on ebooks (and also audiobooks) to 20%, which I'm sure will piss off many UK readers who frequent this forum, myself included. http://www.thebookseller.com/news/12...off-books.html

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06-22-2010, 12:07 PM	#2
GeoffC Chocolate Grasshopper ... Posts: 27,599 Karma: 20821184 Join Date: Mar 2008 Location: Scotland Device: Muse HD , Cybook Gen3 , Pocketbook 302 (Black) , Nexus 10: wife has PW	What mean they by "could increase" - they really mean will increase ....

06-22-2010, 12:10 PM	#3
HarryT eBook Enthusiast Posts: 85,544 Karma: 93383099 Join Date: Nov 2006 Location: UK Device: Kindle Oasis 2, iPad Pro 10.5", iPhone 6	This is a highly misleading announcement. What has happened, in case anyone isn't aware, is that it today's budget the new government has announced that, from 4th Jan 2011, the VAT rate is going to rise from the current 17.5% to 20% (which is pretty much in line with the rest of the EU). Given that eBooks and audiobooks are subject to the standard rate of VAT, naturally they will also be charged VAT at 20%.

06-22-2010, 12:12 PM	#4
omk3 Wizard Posts: 1,454 Karma: 37243 Join Date: Dec 2009 Location: Europe Device: pocketbook 360, kindle 4	It wasn't misleading, that was exactly what I got by reading it. The real question is, why are ebooks and audiobooks still subject to vat when paper books aren't?

06-22-2010, 12:13 PM	#5
GeoffC Chocolate Grasshopper ... Posts: 27,599 Karma: 20821184 Join Date: Mar 2008 Location: Scotland Device: Muse HD , Cybook Gen3 , Pocketbook 302 (Black) , Nexus 10: wife has PW	generally because it is classed as digital media ....

06-22-2010, 12:15 PM	#6
omk3 Wizard Posts: 1,454 Karma: 37243 Join Date: Dec 2009 Location: Europe Device: pocketbook 360, kindle 4	sure, but it makes no sense to not reclassify them as books, because that's what they are after all, digital or not.

06-22-2010, 12:19 PM	#8
GeoffC Chocolate Grasshopper ... Posts: 27,599 Karma: 20821184 Join Date: Mar 2008 Location: Scotland Device: Muse HD , Cybook Gen3 , Pocketbook 302 (Black) , Nexus 10: wife has PW	in other words Europe hasn't yet "gotten with the times .... "

06-22-2010, 12:20 PM	#9
omk3 Wizard Posts: 1,454 Karma: 37243 Join Date: Dec 2009 Location: Europe Device: pocketbook 360, kindle 4	surprise surprise...

06-22-2010, 02:29 PM	#15
Kali Yuga Professional Contrarian Posts: 2,045 Karma: 3289631 Join Date: Mar 2009 Device: Kindle 4 No Touchie	From what I'm hearing, raising VAT by 2.5% is going to be one of the least shocking of the upcoming changes in the UK. Public sector pay frozen, slashing govt spending by 25% almost completely across the board, capital gains tax increases... Y'all are gonna have LOTS of fun in October, when the full slate of taxes and cuts is announced. I'm unclear on why books got an exemption from VAT in the first place, aside from their use by education. As such, I don't see why ebooks should automatically fall into a different category than any other digital purchases. However, I find it rather amusing that an "ebook is just a book" whenever classifying it that way means a lower cost for the punters. Of course, if a publisher says it's going to charge the same for an ebook as a paper book, mass hysteria ensues because "ebooks are not the same as books...."

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