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

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
 

Blue Velvet

Moderator emeritus
Jul 4, 2004
21,922
168
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.
 

liketom

macrumors 601
Apr 8, 2004
4,157
24
Lincoln,UK
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
 

Blue Velvet

Moderator emeritus
Jul 4, 2004
21,922
168
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.
 

Applespider

macrumors G4
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!

What!? So America doesnt have tax. That is so cheap!:mad:
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)
 

bartelby

macrumors Core
Jun 16, 2004
19,797
4
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.
 

benjydababy

macrumors newbie
Original poster
Dec 9, 2006
27
0
London - UK
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)
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
 

benjydababy

macrumors newbie
Original poster
Dec 9, 2006
27
0
London - UK
The big exception being healthcare
LOL :D

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

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)
ohh thanks. :D Still, is tax in America 17.5%?
 

ebony

macrumors regular
Mar 22, 2007
149
0
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 !!!
 

benjydababy

macrumors newbie
Original poster
Dec 9, 2006
27
0
London - UK
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 !!!
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.
 

A Pittarelli

macrumors 6502
Jun 1, 2007
378
0
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
 

ebony

macrumors regular
Mar 22, 2007
149
0
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 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.
 

benjydababy

macrumors newbie
Original poster
Dec 9, 2006
27
0
London - UK
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.
You can't really lose. And I would get a holiday out of it :)
 

mkrishnan

Moderator emeritus
Jan 9, 2004
29,777
12
Grand Rapids, MI, USA
So does the Tax actually get charged after, or is it always that low price?
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.
 

benjydababy

macrumors newbie
Original poster
Dec 9, 2006
27
0
London - UK
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.
thanks :D thats really helped. Now I dont think of Apple as cheating me out of money, but its all a legal thing. :)
 

Macky-Mac

macrumors 68030
May 18, 2004
2,593
1,151
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.
it's true! it's true! ........... EVERYTHING!!!

It's a real shock for an American to go to London.
 

AutumnSkyline

macrumors regular
Oct 5, 2006
219
0
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 :).
 

Blue Velvet

Moderator emeritus
Jul 4, 2004
21,922
168
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!
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.