Apple Bumps UK Prices as VAT Rises

[Umbongo]

Someone just said the exact same thing a couple posts above yours, and I'll give you the same response I gave them.

You may not recall it, but they did.

Yep they did.

Then they put all their prices back to the "psychological levels" within the first half of the year (essentially rising prices) and then when VAT went back up to 17.5% put prices up to include the increase until they refreshed them again, which was 9 months with some products.

The prices will be all back to ending in "9.00" again as Apple updates products through the year.

For anyone wondering, iTunes pricing is based on a 21.5% digital services EU tax so that won't change.

 

[malcolmffc]

Apple's prices in the UK are higher without taxes because, rightly or wrongly, the cost of business in the UK for Apple will be higher.

Apple is legally required to provide 28 days of paid holidays, statutory sick pay and healthcare (via employers' National Insurance contributions) for all its UK employees (yes, even the foot soldiers who work in the Apple Store.) I'd wager none of this is provided in the US, so costs are lower.

 

[Ironduke]

Of course Apple has to raise the prices. The friggin tax will reduce sales, not to mention increase unemployment and drive the UK straight back to the Stone Age. If the U.S. ever tries to introduce a VAT tax, there WILL BE a full-on revolution.

On the other hand you will happily sit back and Let wall street cripple the world economy, because deep down most of you still believe you will become one of the Have's before you die.

 

[iphoneblack]

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Oh ****!!! I was born in Hong Kong; I moved to the U.S. when I was 14. This is the first time I wanted to say "I am proud to be American!!!" Muhahaha I don't need to pay extra for Apple products!!

 

[malcolmffc]

I'm surprised so many in the US are anti-VAT as it's very pro-business. Effectively, the business only pays tax on the profit it makes between selling the item to the consumer and buying it from the wholesaler. Could it be that people are simply posting anti-tax nonsense without bothering to check the facts?

 

[Ironduke]

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Oh ****!!! I was born in Hong Kong; I moved to the U.S. when I was 14. This is the first time I wanted to say "I am proud to be American!!!" Muhahaha I don't need to pay extra for Apple products!!

Dont get sick funboy.

 

[Full of Win]

Funny, I just buy from Amazon.com and forge the State tax.

 

[sasza]

Don't complain UK residents

Other EU countries have even 23% VAT.

 

[avidos]

this was an opportunity for apple to realighn prices with the US a little as they are priced higher in the UK already (pre tax) so all I see is greed...how much are they worth again?

 

[avidos]

I'm surprised so many in the US are anti-VAT as it's very pro-business. Effectively, the business only pays tax on the profit it makes between selling the item to the consumer and buying it from the wholesaler. Could it be that people are simply posting anti-tax nonsense without bothering to check the facts?

it might be good for some business but if you are a small not vat-able business it sucks. and if your a consumer it sucks.......I know the facts, and I guess most other around here do too.....

 

[batchtaster]

Last I checked, UK prices (without VAT) are higher than US prices (without Tax) but a noticeable margin. Now I know Apple is not charity nor are they known for affordable products. But couldn't they just have absorbed the cost?

This may come back and bite them in the arse.

Boohoo. Without the 10% GST, Australian prices are a minimum of 1.1 * US prices (1.16 for base Mac Pro). They should in fact be lower, as the AUD has surpassed parity with the USD.

 

[rstansby]

That makes sense, but after reading your comment I was interested so I did a little googling and I found out that what you said is true of *many* business costs, but is definitely NOT true for a very significant amount of business costs, and this definitely must account for a significant portion of Apple's higher prices in the UK.

Quote from wiki:




http://en.wikipedia.org/wiki/Value_added_tax#European_Union

I think there are a lot of factors, besides VAT, that make it more expensive for Apple to do business in foreign countries. For example shipping costs of items that come from the US, and travel expenses for training staff...

 

[rstansby]

Boohoo. Without the 10% GST, Australian prices are a minimum of 1.1 * US prices (1.16 for base Mac Pro). They should in fact be lower, as the AUD has surpassed parity with the USD.

This is a recent change, historically the AUD has be worth less than the USD.

Also you have ignored the fact that it costs Apple more to do business in a foreign country.

 

[benspratling]

Apple is doing both, but customers always pay.

"Some observers had hoped that Apple might choose to simply absorb the tax increases by reducing their prices slightly in order to maintain the psychological price points used for many of their products, but the company obviously decided that it needed to pass along the tax increase to consumers in order to maintain its margins."

As I understand VAT, they've had a 2.5% increase, but most of the product prices only went up by 2% to 2.2%, so Apple gets less money for every product, and the consumer pays more, which is normal practice for every business with rising taxes. But remember, in the end, the customer always pays for all of it.

Frankly, I don't understand why businesses in Europe don't list the product price separately from the tax.
like old price:
iPhone £354 + £75 tax
new price:
iPhone £351 + £88 tax

 

[Gromit]

UK VAT had been lessened to 15% (from 17.5%) as part of stimulating the economy after the crash. It went back to 17.5% a year ago and now 20%. The new Government in the UK are billing this as part of their austerity packing to lessen the deficit.

You US posters may shrug "**** you UK", but you should be frightened because the Republicans are watching and taking notes. You may be in the same boat sooner than you would like.

 

[TrickyTree1984]

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Are retailers required to advertise the price with tax? I don't know of anywhere that happens in the US except vending machines, but maybe that's because we don't have national sales tax.

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

 

[jwkay]

Other EU countries have even 23% VAT.

There are European countries with 25% VAT: Hungary, Denmark, Sweden, Norway. Many, including Poland, the Baltic states etc, lie between 20-24%. The lowest by a massive margin is Switzerland - just 7.6%.

 

[SandynJosh]

Of course Apple has to raise the prices. The friggin tax will reduce sales, not to mention increase unemployment and drive the UK straight back to the Stone Age.

From what I saw of students throwing rocks over having to pay for their education, they were demonstratibly near the stone age even before the increase in VAT.

Free Applecare over the life of the Apple products should also be worth something... want a better warranty, pay for it.

 

[benspratling]

UK VAT had been lessened to 15% (from 17.5%) as part of stimulating the economy after the crash. It went back to 17.5% a year ago and now 20%. The new Government in the UK are billing this as part of their austerity packing to lessen the deficit.

You US posters may shrug "**** you UK", but you should be frightened because the Republicans are watching and taking notes. You may be in the same boat sooner than you would like.

I'm not sure a VAT is better, but it certainly is simpler, and it eliminates all those evil loopholes people get for politician-approved behavior, unless of course they get added right back on. But if it's the rates we're talking about, I hope the Republicans do reduce tax rates to 17.5 or 20%, that would open up a solid 7%-9.5% of my monthly budget for things I want like a gas grill, a bed-stand dock for my iPhone, the Carol Burnett show on DVD (Netflix, where are you when I need you?), oven mits, and I could move to a duplex instead of this nasty apartment.

 

[314631]

You US posters may shrug "**** you UK", but you should be frightened because the Republicans are watching and taking notes. You may be in the same boat sooner than you would like.

They must have misplaced those notes on a trip somewhere. The Republicans just very recently struck a deal with Obama's administration to extend tax cuts for everyone. Republicans claim to favor reducing the deficit in public, but ideologically they are strongly opposed to raising taxes - particularly on the wealthiest in society.

 

[SandynJosh]

this was an opportunity for apple to realighn prices with the US a little as they are priced higher in the UK already (pre tax) so all I see is greed...how much are they worth again?

You don't realize that it costs more money to do business in the U.K., there's the extra costs of translators for one thing.

 

[UrsaMajor]

It will hurt apple sales in the end. They get enough premium as it is. The uk and rest of Europe is I'm deep financial distress.

It will help new tablet makers this year. Once they get competing with apple and sell at a lower price, apple will have to cut prices to keep up.

 

[peterdevries]

You wanted a socialist paradise. Enjoy.

As you are from Hollywood, I'm sure you are aware of the fact that California is flat broke, and that the next financial crisis the Americans will face will be repaying the incredible credit card debt that most households have?

You might say that freedom is paramount, but most americans obviously cannot even be trusted to manage their own freedom in personal financing.

E.g.: I'll take 20% VAT over 8% any day if it means I get my savings back when a bank defaults in the Netherlands.

But you shouldn't trust what we Europeans say, because the commies have put fluoride in the tap water that makes us this way.

 

[SandynJosh]

On the other hand you will happily sit back and Let wall street cripple the world economy, because deep down most of you still believe you will become one of the Have's before you die.

You're talking about the fata$$ed Republicans now. Them are fightin' words.

 

[UrsaMajor]

I think there are a lot of factors, besides VAT, that make it more expensive for Apple to do business in foreign countries. For example shipping costs of items that come from the US, and travel expenses for training staff...

No. Apple gets it's manufacturing done super cheap in china. A global market and distribution is to be expected. I've received my apple purchases shipped direct from china to my door in the usa with fedex.

Oh by the way, fedex is upping their shipping rates for this year. So apple will have to eat those costs for free shipping. 5.9% rise.

I really don't expect people to be buying premium computers and iPads if the prices of everything keeps going up and people are still jobless. I'm done holding apple stock for a while.