Tuesday, 18 March 2014

VAT to rise on UK ebooks

I was reading through some of the pre-budget coverage and I saw that VAT on ebooks is going to rise from 3% to 20%.

At present Amazon, Apple, Microsoft etc charge VAT at 3% because they are all registered in Luxembourg. From January 2015 VAT is going to be charged based on the country the purchaser is in, not the country the company is registered in. As such VAT on UK ebooks will rise to 20% and a £1.93 ebook will rise in price from £1.99 to £2.32 (assuming the author/publisher doesn’t reduce their cut).

As this is quite a significant increase I expect Amazon to respond by altering (amongst other things) the lowest price they will allow to be charged in the UK (currently that’s 77p), but we will see. January is quite a way off, and I’m meant to be writing book 3.

This is also going to impact on other e-goods (and services), such as apps, games etc and there’s an article in the FT here which goes into more detail: