Apple Bumps UK Prices as VAT Rises

[Cibbersicks]

Yeah VAT at 20% sucks, but lets not forget we already paid 17.5% for long time, it's only an increase of 2.5%...
An extra £2.00 on an Apple TV2 really isn't going to uspet me, the vast majority here in the UK buy their iPhones via contract at subsidised prices, so Apples outright prices for iPhone are not a major concern.

What really is going to upset me are the new fuel prices today... I've seen £1.29 per litre today. Not good at around 75% tax - I really don't know how they expect us to keep going when our wages aren't rising accordingly.

 

[rsocal]

I'm suprised at some people that expect a company to pay a tax placed on goods by a government? I can only compare it to, once again some people feeling entitled. I hate paying taxes as much as the next, but we have to pay for all the entitlement programs as well as what's needed to run a government.
I don't walk into a Apple Store and expect them to absorb the tax, if you can't afford the extra amount, save for a little longer!

 

[daveathall]

Any retailer that absorbs a government tax and in so doing hiding it from the public view is heading down a very slippery slope.

Do some UK retailers actually do this? Do they they at least inform the consumer of the favor?

Yes, quite a few really, and yes.

 

[Dr McKay]

Thank god for my laughably small Military Discount.

 

[Optimus Frag]

So it's your fault then for voting Brown in - who put us in this defect in the first place?

Talk about shirking responsibility...

Yes, because the Prime Minister of one country was COMPLETELY responsible for the WORLD wide recession that hit everyone.

It had nothing to do with multi-national, multi-billion banks gambling on sub-prime loans, nothing to do with traders speculating wildly on oil, gas and grain, nothing to do with all governments (including our own so you don't think I'm being biased) ignoring the irresponsible and reckless manner in which those institutions conducted business as long as the corporate tax revenue kept pouring in, nothing to do with the fact that when these people messed up, couldn't hide it anymore and they went hat in hand begging for governments and tax-payers to bail them out. If we were a truely capitalist society, we would have just let them go to the wall as all other failing companies should and do. But because they had become such an intrinsic part of economies we had to bail them out. And were going to paying for it for a long time to come...

But all of that was one mans fault so we can just blame him and not blame ourselves for failing to hold to account those institutions by allowing ourselves to continuously to vote in weak willed politicians held in thrall by the power of multi-national corporations and lacking the backbone and courage of conviction to say NO to them when they should.

When it comes to shirking responsibility perhaps it might be a good idea for everyone to look in a mirror and ask it was really a good idea to buy a lot of stuff we couldn't afford, using credit that wasn't ours. I'm guilty of that in the past (not now, got rid of my credit cards years ago, I only buy what I can pay for), I'm sure you've been guilty of it and I'm sure most of us have been in the past. When you look at yourself, ask that and answer truthfully, then you know what responsibility is.

 

[goosnarrggh]

In Canada ... prices are shown without the 13% HST ... because virtually everything you buy has 13% added to it ... the Harmonized Sales Tax is just a given.

HST ... "Harmonized" sales tax... That's a laughable term.

Back when it was first introduced about a decade and a half ago, it made real sense -- every province which signed on to the program would have the exact same sales tax ... making it easier for businesses to coordinate their pricing across the country, making it easier for consumers to predict the price of any inter-provincial mail-order sales, etc.

But then, very few provinces signed on, which only served to complicate inter-provincial mail orders -- GST+PST when selling in-province, GST-only when selling out-of-province to most customers, HST when selling to a select few out-of-province customers...

Then some provinces started exempting certain classes of products from the provincial portion of the tax...

All of this effectively killed the "Harmonization" of the sales tax.

Later, when ON and BC joined the HST bandwagon, NS took the opportunity to use a loophole in its agreement with Ottawa, to raise the provincial component of its HST, so the "Harmonized" tax in NS doesn't even use the same percentage as the "Harmonized" tax in all the other provinces which use it.

It's a mess.

By the way, back in the day, there was no federal value-added tax in Canada. Most provinces had a value-added tax, but the federal government took its cut by taxing companies directly for the value of all their output of manufactured goods. The companies complained that this was needlessly hurting their international competitiveness by inflating the prices of any products they exported. So the federal government reacted by scrapping the manufacturers' tax, and introducing a federal VAT, which they called the GST.

Originally the proposed regulation would have been that the GST would be included in all advertised consumer prices -- which was expected to result in roughly maintaining the status quo, because manufacturers used to have to set their recommended retail prices based upon their own need to recover the cost of the manufacurers' tax. (Except for the "services" industry, which had never been subject to a federal sales tax before the GST.)

But that was scrapped in favour of making it up to the individual retailer to decide whether to advertise their prices pre- or post-GST. The vast majority decided to advertise the pre-GST price, and it has remained that way.

 

[Rot'nApple]

That's unfortunate I guess?
Like we don't pay enough for Apple products..

Like, do you pay enough in taxes?

Boy the government certainly has you trained good. Let's blame the company for increasing their product prices and not the "governing authority" that placed the tax increase in the first place.

I can't tell how many times I've seen a dumbfounded look on a liberal politician or an ivy-school elite when told a tax on a corporation is a tax increase on the citizen! If Apple, whose CEO is a left leaning guy, except when it comes to business apparently, if he doesn't follow through as a company and absorb the cost increase the tax creates, then I guess you can close the books on this one! Any tax to increase revenues or as a penalty, just gets passed on to the consuming public!

Thanks government. As if my Apple products didn't cost enough already!

 

[Les Kern]

Wow, VAT is ridiculous! 20% is crazy. read studies that VAT didn't help maintain a lower overall cost of taxes as "theorized", the money was just spent by the politicians anyway. No wonder so many Europeans come to the USA for shopping trips and smuggle their purchases back in

In England (or in Europe for that matter) not one person lost their home because of a lack of health care and everyone is covered. Not like here, where 50 million aren't and 80% of the forclosures are because of this. I'd say that was a damn good trade off. But no, we selfish, greedy American's gotta complain about something.

 

[Bobbytoad]

Love the way the 2.5% tax rise ona £25 ipad accessory is exactly £1 (ie. camera kit now £26) where as my calculator makes 2.5% of £25 to be 62 pence, so Apple are making an extra 38 pence from the VAT increase - Very cheeky, but then again why would they want pocket change when they can deal in round pounds

 

[4D4M]

Fellow Brits, the solution is simple:

Start a company, become VAT registered, buy a Mac and use it for business purposes, and you get to claim all the VAT back from the government.

No VAT on my last 7 Macs!

 

[KnightWRX]

Every where except the US pretty much. I found it very confusing when I was in th US. it's good to know what you will pay before you get to the till. I have yet to go to a country other than the US that doesn't do this

Canada. GST+PST gets added at the register.

 

[Westyfield2]

Thank god for my laughably small Military Discount.

That reminds me...

I haven't got a screenshot of the Apple HE Discount Price Pre-VAT Rise, but below is the new Apple HE Discount Price Post-VAT Rise.

Though unlike most people buying with HE discount, I actually am a legitimate student!



To all the Americans that don't get why the Brits are whining: Apple aren't a charity. We understand that. If you want something you have to pay the price. We understand that.
The issue people have is that the USA Pre-Tax price (displayed on the Apple Website) and the UK Pre-Tax price (found on your receipt or calculated from the website with a simple bit of maths) is different. The Apple TV for example costs £84.17 (+ £16.83 Tax at the new 20% rate) in the UK. At the current rate of 1 GBP = 1.56028 USD that £84.17 is $131.33. However the Apple TV costs $99 (+ $varying Tax) in the USA. This difference of $32.33 Pre-Tax is what annoys people, and is why some people wrongly thought that Apple might have absorbed the VAT increase in the UK into their profit margin. If Apple had, as some people hoped, reduced the UK Pre-Tax price to £82.50 (and thus kept the Inc-Tax price to £99 with the new 20% rate) the UK consumer would have thought how warm and cuddly Apple was at absorbing the VAT rise into their profit margin and overlooked the fact that the Pre-Tax price was $29.72 higher than in the USA.

However as others have pointed out previously Apple's cost of trading in the UK is probably higher than the USA due to both the customers statutory rights and the employees rights....

 

[wizard]

The liberal/socialist agenda has to be feed somehow!

Wow, VAT is ridiculous! 20% is crazy. read studies that VAT didn't help maintain a lower overall cost of taxes as "theorized", the money was just spent by the politicians anyway. No wonder so many Europeans come to the USA for shopping trips and smuggle their purchases back in

It isn't just Europeans coming to the USA. People from Brazil and other parts of South America come either due to high taxes or out right import restrictions that make purchasing stuff impossible.

What is sad here is that no body in Europe stands up and says enough. Rather they suffer a steady decline in their standard of living. Worst they see all those tax dollars going to support rather dubious causes yet turn a blind eye.

 

[Rot'nApple]

Yes, because the Prime Minister of one country was COMPLETELY responsible for the WORLD wide recession that hit everyone.

Prime Minister?... The way we hear it over here in America by Obama and the Democrats, this was ALL President George Bush's fault! Somebody should really tell your PM, he's getting a bum rap!

 

[gnasher729]

This isn't Apple's fault. It's the ConDem coalition government's fault. Thank you Chancellor Osbourne while you're swanning off on your £8000 ski holiday. Bet he made sure that was paid off before he increased the tax.

See, you moan about a £8,000 ski holiday. I'd moan about idiots in the old government signing a contract that forces the new government to pay £3bn for a carrier that nobody wants. (Don't know where that £8,000 number comes from though).

 

[coldsweat]

I can't quite remember - when the UK VAT rate temporarily dropped to 15% a while a go, did Apple drop their prices??

 

[wibbly_pig]

Fair enough to follow the VAT rise. But I don't remember Apple's prices falling when VAT dropped to 15% in 2009 (though I might have just forgotten). Seems to be the done thing (not just with Apple, but also with fuel etc) - follow any rises, ignore any falls...

 

[wizard]

Yes



The US situation is both good and bad. Good, because it reminds the customer how much tax they're paying - and that keeps politicians in check. Bad, because it's annoying to have to keep working out how much you'll have to pay.

What is so damn difficult about doing multiplication of addition in ones head. If anything it is a good exercise even if one just estimates the taxes.

I think a lot of retailers will just swallow the increase.

Which would be extremely stupid.

Apple do overcharge us (looking at the before VAT price) but our consumer rights are better than in the US and that does add to their cost. Effectively we can demand the repair or replacement of a product during it's natural life if it breaks due to a manufacturing defect... and that gives us some of the benefits of extended Applecare 'for free'.

Then obviously they aren't over charging are they. It appears that the cost of the legislated warranty requirements are built into Apples price. Well that is probably part of it but I would imagine there are many other corporate costs for doing business in the UK.

 

[goosnarrggh]

I can't quite remember - when the UK VAT rate temporarily dropped to 15% a while a go, did Apple drop their prices??

Already discussed in this thread: Yes.

However, many other businesses kept their register prices the same, resulting in those other businesses pocketing the difference through increased margins.

 

[Queso]

What is sad here is that no body in Europe stands up and says enough. Rather they suffer a steady decline in their standard of living. Worst they see all those tax dollars going to support rather dubious causes yet turn a blind eye.

Europeans in general are more prosperous than we've been for most of the past century. I also fail to see how trying to eliminate government budget deficits counts as a "dubious cause". Much better than burying our collective heads in the sand and pretending we can carry on borrowing forever.

 

[BertyBoy]

20% VAT is crazy high. No wonder people in the UK try to buy products via the underground.

JohnG

Just to clarify, supporting all the posts that are astonished at this:
The biggest online retailer in the UK is ... of course, Amazon.co.uk.

The second biggest online retailer in the UK is ... Amazon.com. That's UK consumers, like me, buying goods direct from US suppliers and having them shipped over here, because it still works out cheaper than buying here.

The VAT rise gets me angry, not at the government, they're only trying to recoup the £2.4bn lost when the previous government reduced VAT to 15%, it made no difference to boosting the economy, the only effect was billions less for the lazy sods in the public sector - or rather an extra few billion on the deficit.
The real culprits with the VAT increase are the retailers who up their prices by 2.5% (and maybe a little more). Of course, a rate rise from 17.5% to 20% should see prices increase by no more than 2.1%. It looks like Apple is right on this figure.

 

[Plutonius]

Yes but when you put how much I pay for health care that 20% looks nice and cheap.

I bet that over a years time, I'm spending much less in healthcare cost then you are spending on the 20% VAT.

 

[OllyW]

I can't quite remember - when the UK VAT rate temporarily dropped to 15% a while a go, did Apple drop their prices??

Fair enough to follow the VAT rise. But I don't remember Apple's prices falling when VAT dropped to 15% in 2009 (though I might have just forgotten). Seems to be the done thing (not just with Apple, but also with fuel etc) - follow any rises, ignore any falls...

Apple dropped their prices when the VAT was reduced to 15% and increased them again when it returned to 17.5%.

Today's increase for the new 20% rate was expected.

 

[Rot'nApple]

In England (or in Europe for that matter) not one person lost their home because of a lack of health care and everyone is covered. Not like here, where 50 million aren't and 80% of the forclosures are because of this. I'd say that was a damn good trade off. But no, we selfish, greedy American's gotta complain about something.

Funny... I don't recall the housing debacle being a byproduct of a lack of health care... I thought it was more to do with dumb ass policy where the government told the banks they had to loan money to people who could not afford to buy a house in the first place...

Hmmm... "Debacle" and "people who can't afford"... Knew the words "government" and "dumb ass policy" had to show up in the mix, didn't you!

 

[OllyW]

Europeans in general are more prosperous than we've been for most of the past century. I also fail to see how trying to eliminate government budget deficits counts as a "dubious cause". Much better than burying our collective heads in the sand and pretending we can carry on borrowing forever.

You mean debt like this?