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UK Macs are seriously overpriced. [I now understand the effects of VAT thanks all =)]

B

benjydababy

macrumors newbie
Original poster
Dec 9, 2006
27
0
London - UK
No, this isn't some thread saying how insanely expensive Macs are compared to PC's. It is more how much more expensive Macs are in the UK compared to the US store.

I live in the UK and I have recently been looking around at laptop prices. I know the UK Apple store prices pretty well, and all other secondary retailers seem to sell their MacBooks at the same price. I then strayed onto the US Apple store, and as all the prices are in dollars it didn't really mean much to me. However when I did a currency conversion, I was shocked to find out how much cheaper a Mac was in the US:

The lowest priced MacBook on the US store is $1099 (£539). In the UK, the lowest priced MacBook with exactly the same spec is £699 ($1425). Quite a difference; £160 ($326) in fact. Even Mac OS X - I can assure you it is exactly the same Mac OS X - is £26 ($53) more expensive.

So where is this excess money going. I cannot imagine it would be any cheaper to ship Macs to America than it is to the UK, so why the massive price increase? Answer me that. :confused:

Thanks to all that contributed, I now understand. You learn something new everyday :p
 
UK prices include VAT at 17.5%...

US prices do not include local sales tax which can vary from state to state. However, I believe that most state sales taxes are in the single figure range.
 
Value Added Tax seems to take it up a bit for us UK chaps - in the USA i understand they have there own taxes too to add on
 
Anyway, almost everything is cheaper over in the US. Not just Macs... Or so I'm assured by an American acquantaince of mine. Better get used to it.
 
The US store doesn't show sales tax, the UK store shows VAT in the prices.

There is customisation for the UK market - the keyboard layout is different. Not just a £ sign but a differently shaped return key too. And there's a different plug.

Having said that, at the moment, you have a point. The pound is particularly strong against the dollar and Apple's price conversions are generally done at the conservative end. They'd argue that they can't cut the price to the 2:1 dollar/pound rate since then when the exchange rate went down again, they'd have to put the prices up again hugely. They have cut a little off prices here and there but I'm guessing there may be another price adjustment when new Macs/iPods come out. In the meantime, the better margin that Apple enjoyed recently (with 40% of sales coming from overseas)... that's where some has gone!

benjydababy said:
What!? So America doesnt have tax. That is so cheap!:mad:
Click to expand...

No, they have tax but it varies from state to state so prices are quote online without sales tax and then it's added on when you give the shipping address if appropriate (you don't pay it if the company doesn't have a physical presence in the state IIRC)
 
Every State un the US has a different % of tax. So it would be too messy for the Apple Store to show prices with tax like on the UK store.
 
Applespider said:
The US store doesn't show sales tax, the UK store shows VAT in the prices.

There is customisation for the UK market - the keyboard layout is different. Not just a £ sign but a differently shaped return key too. And there's a different plug.

Having said that, at the moment, you have a point. The pound is particularly strong against the dollar and Apple's price conversions are generally done at the conservative end. They'd argue that they can't cut the price to the 2:1 dollar/pound rate since then when the exchange rate went down again, they'd have to put the prices up again hugely. They have cut a little off prices here and there but I'm guessing there may be another price adjustment when new Macs/iPods come out. In the meantime, the better margin that Apple enjoyed recently (with 40% of sales coming from overseas)... that's where some has gone!



No, they have tax but it varies from state to state so prices are quote online without sales tax and then it's added on when you give the shipping address if appropriate (you don't pay it if the company doesn't have a physical presence in the state IIRC)
Click to expand...

I worked it out and if you add 17.5% tax to the US price, it work out at about £692, but still where is that other £7 going?:p
 
calculus said:
The big exception being healthcare
Click to expand...

LOL :D

bartelby said:
Every State un the US has a different % of tax. So it would be too messy for the Apple Store to show prices with tax like on the UK store.
Click to expand...

So does the Tax actually get charged after, or is it always that low price?

Applespider said:
The US store doesn't show sales tax, the UK store shows VAT in the prices.

There is customisation for the UK market - the keyboard layout is different. Not just a £ sign but a differently shaped return key too. And there's a different plug.

Having said that, at the moment, you have a point. The pound is particularly strong against the dollar and Apple's price conversions are generally done at the conservative end. They'd argue that they can't cut the price to the 2:1 dollar/pound rate since then when the exchange rate went down again, they'd have to put the prices up again hugely. They have cut a little off prices here and there but I'm guessing there may be another price adjustment when new Macs/iPods come out. In the meantime, the better margin that Apple enjoyed recently (with 40% of sales coming from overseas)... that's where some has gone!



No, they have tax but it varies from state to state so prices are quote online without sales tax and then it's added on when you give the shipping address if appropriate (you don't pay it if the company doesn't have a physical presence in the state IIRC)
Click to expand...

ohh thanks. :D Still, is tax in America 17.5%?
 
I'm currently sitting in the airport in the states waiting for my flight home to the uk, with my contraband cheap mac mini snuggled safeley away in my luggage. Had to pay 6.5% tax.

I got a 1 GB upgrade which brought the price to $674 ( £365 approx )

Just hope I don't get stopped at customs now !!!
 
ebony said:
I'm currently sitting in the airport in the states waiting for my flight home to the uk, with my contraband cheap mac mini snuggled safeley away in my luggage. Had to pay 6.5% tax.

I got a 1 GB upgrade which brought the price to $674 ( £365 approx )

Just hope I don't get stopped at customs now !!!
Click to expand...

Ha, that is a good way to do it. And that is so cheap! Wow, maybe I should take a holiday to the states and just buy a Macbook there and hope customs think I had it before I left :p.
 
i think american companies get governmant tax breaks to sell nside the country and pay more tax to export, even if its for the intellectual property
 
benjydababy said:
Ha, that is a good way to do it. And that is so cheap! Wow, maybe I should take a holiday to the states and just buy a Macbook there and hope customs think I had it before I left :p.
Click to expand...

I think as long as you realise you may have to pay the extra 17.5 % give it a go.

It's a business trip so I didn't even have to pay for the cost of coming over.

I'll be using the mini as a second mac for family use so I can keep everyone of my imac.
 
ebony said:
I think as long as you realise you may have to pay the extra 17.5 % give it a go.

It's a business trip so I didn't even have to pay for the cost of coming over.

I'll be using the mini as a second mac for family use so I can keep everyone of my imac.
Click to expand...

You can't really lose. And I would get a holiday out of it :)
 
benjydababy said:
So does the Tax actually get charged after, or is it always that low price?
Click to expand...

Yes, it gets charged afterwards.

In the US, it's legal or at least customary for all prices to be stated exclusive of taxes... even things like airplane tickets and hotel rooms are quoted without taxes (and in those cases, the taxes can be in the 15-25% range). Typically, as you are in the processing of paying for something (either in person or online), you are informed of the total price including sales tax, if applicable. So if you were to check out at the Apple store, I think it tells you what the sales tax you'll be paying is before the final confirmation button click.

The US sales taxes vary from 0-9% at least, with a handful of states not charging sales taxes. 6-8% is pretty typical in the populous states. They're typically levied by the state, but some cities also levy their own tax, so that the tax rate can vary from city to city. Some things are also excluded from sales tax (typically fresh foods at groceries, a few other things).

Here's a summary:

http://en.wikipedia.org/wiki/Sales_taxes_in_the_United_States

With respect to online purchasing, stores are legally required to collect tax if they also operate physically in the state. So occasionally there are online retailers who do not charge an American customer sales tax, and then technically, the customer is supposed to report a "use" tax to their state, which is essentially the sales tax except paid directly by the customer. This never (99% of the time) actually happens.
 
mkrishnan said:
Yes, it gets charged afterwards.

In the US, it's legal or at least customary for all prices to be stated exclusive of taxes... even things like airplane tickets and hotel rooms are quoted without taxes (and in those cases, the taxes can be in the 15-25% range). Typically, as you are in the processing of paying for something (either in person or online), you are informed of the total price including sales tax, if applicable. So if you were to check out at the Apple store, I think it tells you what the sales tax you'll be paying is before the final confirmation button click.

The US sales taxes vary from 0-9% at least, with a handful of states not charging sales taxes. 6-8% is pretty typical in the populous states. They're typically levied by the state, but some cities also levy their own tax, so that the tax rate can vary from city to city. Some things are also excluded from sales tax (typically fresh foods at groceries, a few other things).

Here's a summary:

http://en.wikipedia.org/wiki/Sales_taxes_in_the_United_States

With respect to online purchasing, stores are legally required to collect tax if they also operate physically in the state. So occasionally there are online retailers who do not charge an American customer sales tax, and then technically, the customer is supposed to report a "use" tax to their state, which is essentially the sales tax except paid directly by the customer. This never (99% of the time) actually happens.
Click to expand...

thanks :D thats really helped. Now I dont think of Apple as cheating me out of money, but its all a legal thing. :)
 
Blue Velvet said:
Anyway, almost everything is cheaper over in the US. Not just Macs... Or so I'm assured by an American acquantaince of mine. Better get used to it.
Click to expand...

it's true! it's true! ........... EVERYTHING!!!

It's a real shock for an American to go to London.
 
I live in Massachusetts and there is a 5% sales tax on things here. In New Hampshire, however, there is no sales tax, and that is where I bought my iMac :).
 
Applespider said:
I couldn't believe people were paying $35 or more after ordering in advance on the Harry Potter thread when they were going over here for £5!
Click to expand...

US hardbacks and paperbacks tend to be of a higher quality of manufacture, binding, paper, etc. Perhaps not enough to explain the discrepancy especially with those print runs but there nonetheless. Distribution costs across the long distances in the US might have something to do with as well, especially given the security procedures for this book.
 
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