Tax isn’t the most interesting topic I’ll write about, but this is important information for readers.
From Jan 1 2015, tax on digital products (ebooks, apps, films, digital music etc) bought in the UK from certain retailers will rise from 3% to 20%. This means an ebook that now costs £5 will cost nearly £6 from Jan 1. Expect to see a big hike in prices soon after the new year with a gradual reduction thereafter as authors and publishers jostle to remain competitive.
This situation has arisen because a number of large international retailers such as Amazon, Kobo & Nook are registered in Luxembourg where they have negotiated a favourable 3% VAT rate. Other EC countries are obviously losing out and they have been lobbying hard to change things. From Jan 1, VAT on digital products will be based on the place where the goods are purchased and not where the retailers computers are located.
This will serve to highlight another inequity that exists in the book market, as no VAT is levied on paperback books.
However disguised, this is a big stick to beat Amazon et al over the head with, but ultimately it is readers, authors and publishers who will pay, not Amazon, and it could damage what has been up to now, a fast developing market.
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