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iPad UK Pricing Confirmed; Apple UK Tax Applied

Posted by kdawson on from the dig-deep dept.

The iPad will be available in the UK and eight other countries from 28 May 2010; both models will be available for pre-order on 10 May. Reader marcopolo007uk adds a note from iPad-Review.co.uk with pricing: "WiFi Models: 16GB / 32GB / 64GB — £429 / £499 / £599. 3G versions: 16GB / 32GB / 64GB — £529 / £599 / £699. These are a little higher than some had guessed... The Apple Tax stings the UK consumer again." At the current exchange rate, these prices are right around 150% of those offered in the US.

17 of 248 comments (clear)

  1. The OP forgot VAT. by Dzimas · · Score: 5, Informative

    Someone can't do math. The numbers are actually really close. Let's look at the base 16GB model. It's £429 in the UK, which equals about $630 according to xe.com. Take off the 17.5% VAT, and we get £353.93. That equals $520 US. What's the problem again???

    1. Re:The OP forgot VAT. by MoonBuggy · · Score: 4, Informative

      By replying to your post with a technical correction, I don't doubt that I'm setting myself up to make some obvious mistake, but anyway: the UK prices already include VAT, so by simply subtracting 17.5% of that total you're over counting the tax (as it's 17.5% of the base, untaxed price).

      £429/1.175=£365.11, which is approximately $537.80. The mark up from the US prices seems to be around 8%. It's not terrible, I guess, and it's certainly not as bad as it used to be, but 8% on an already expensive product is still a reasonable chunk of change.

    2. Re:The OP forgot VAT. by evilbessie · · Score: 2, Informative

      You might want to do your maths again, as to remove vat you need to multipy by 40/47, which is £365.11, or $537.84 (using 1.4731 as the exchange rate, just retrieved from the beeb).

    3. Re:The OP forgot VAT. by MoonBuggy · · Score: 5, Informative

      Also, since the summary presents the UK price as a percentage of the US one, here are the actual figures:

      Wifi
      16GB 32GB 64GB
      108% 104% 107%

      3G
      16GB 32GB 64GB
      105% 103% 106%

  2. Pleased I didn't wait by DavidR1991 · · Score: 1, Informative

    I like Apple's products but this price is too high for what the iPad is. I recently bought a second hand Tablet PC (a Fujitsu Stylistic) for £180 and shoved Ubuntu Linux and an 8GB SSD in it. Sure, it's bulkier than an iPad but I don't regret my choice now I've seen the UK price. Screw them and their price mark up

    1. Re:Pleased I didn't wait by Lumpy · · Score: 3, Informative

      why dont you run AndroidX86 on it?

      http://www.android-x86.org/

      --
      Do not look at laser with remaining good eye.
  3. EU/UK vs. American Pricing by tlhIngan · · Score: 5, Informative

    Let me guess - in Europe, you'd pay exactly those prices listed? No sales tax added on?

    So you'd pay £429 / £499 / £599 / £529 / £599 / £699 for an iPad and not a penny more in sales/VAT?

    That's one thing we have in North America - the prices listed ($499/$599/$699/$629/$729/$829) are sans sales tax. So add anywhere from 0% (a few states), to 5-10% to the actual price that Americans pay. Or in Canada, anywhere from 5-15% in sales taxes.

    In the UK, the prices tend to be all inclusive - you pay what you see, so all the hidden consumption taxes get built in. VAT of nearly 20%, plus other import taxes and duties and the like. I'm guessing the price gap is a lot smaller than you think.

    It's just that governments have used built-in taxes to hide how much taxes are really on products. Happens on this side of the pond with stuff like gas when you actually break down the price.

    For example, the 16GB WiFi iPad - £429 is around $630 US. $500 US for the same iPad, plus taxes will probably mean one pays $530-$550 in the US. If we assume the total tax load is (VAT+importation taxes plus duties) 20% for the UK, that $500 iPad becomes $600 instantly.

    1. Re:EU/UK vs. American Pricing by Tim+C · · Score: 3, Informative

      Let me guess - in Europe, you'd pay exactly those prices listed? No sales tax added on?

      I can't speak for the rest of Europe, but here in the UK you are correct - we pay the list price. Sometimes the price is listed as "ex VAT", so you have to factor in an extra 17.5% on top, but that's almost exclusively done by merchants that are targeting business customers. (And generally the price inclusive of VAT is listed alongside anyway)

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    2. Re:EU/UK vs. American Pricing by Alnitak73 · · Score: 2, Informative

      Sometimes the price is listed as "ex VAT", so you have to factor in an extra 17.5% on top, but that's almost exclusively done by merchants that are targeting business customers.

      Prices advertised to consumers must in UK law be the VAT inclusive price. The "ex VAT" price may also be shown, but the total price has to be the headline price.

  4. But your U.S. prices do not include tax by SuperKendall · · Score: 5, Informative

    £429/1.175=£365.11, which is approximately $537.80. The mark up from the US prices seems to be around 8%.

    Unless you factor in that you have to pay sales tax in most places in the U.S - which coincidentally for my area is 8%, so basically the exact same price in the end.

    --
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    1. Re:But your U.S. prices do not include tax by godawful · · Score: 4, Informative

      Quite right, my 16GB non 3g after taxes was $550 here in California.

      --
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    2. Re:But your U.S. prices do not include tax by Anonymous Coward · · Score: 1, Informative

      That's usually the case, yes. However, the only online outlet for them (as of now) is Apple. If your state has an Apple store, you have to pay sales tax. Best Buy sells them as well, but only in-store.

    3. Re:But your U.S. prices do not include tax by SSpade · · Score: 2, Informative

      I always consider sales tax in the US to be a bit of a non-issue on things like this, since (unless I'm mistaken) avoiding it is pretty trivial, by ordering online from a distributor in another state.

      You're not mistaken that avoiding it is pretty trivial, but it's also probably tax fraud.

      Most states require you to pay a "use tax" at the same rate as your state sales tax on anything you order from out of state and don't pay sales tax on. As with any other tax fraud you're fine until you get audited.

    4. Re:But your U.S. prices do not include tax by gyrogeerloose · · Score: 3, Informative

      You're not mistaken that avoiding it is pretty trivial, but it's also probably tax fraud.

      That's yet to be determined. The states say it is, the vendors say it's not; right now, the vendors are winning but you can expect to see it in the courts eventually. I think that Amazon.com and the State of California are going to go at it before long.

      --
      This ain't rocket surgery.
    5. Re:But your U.S. prices do not include tax by Relayman · · Score: 2, Informative

      Yes, you have to pay sales/use tax. Check your state income tax return. You're likely required to pay sales/use tax on anything you bought online that you didn't pay tax on at the time of purchase. If you're going to cheat on your taxes, at least be aware that that's what you're doing...

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  5. Simple math is obviously beyond you... by Space+cowboy · · Score: 4, Informative

    UK VAT (the equivalent of sales tax in the USA) is 17.5%

    Removing the tax so we can compare fairly: £429 / 1.175 => £365.11

    Converting pounds to dollars: £429 = $539.94 (currency rate is 1 GBP = 1.47884 USD)

    So, the difference (before taking into account the import duties of ~10%) is $539.94 - $499.99 or ~$40.

    Subtracting $53 (estimated) of import duty means Apple is charging less than they do in the USA.

    Simon.

    --
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  6. Re:So what makes up 50% extra or more, then? by gnasher719 · · Score: 2, Informative

    No, this is still not 150%, but it's more than three times the £20 that you said it was. Unless there is some other "sales tax" in the UK other than VAT, in which case you can call me an uninformed American and move on. :-)

    Not uninformed, but non-thinking.

    In the USA, the quoted price (the price you see in an advert or in a shop) is exclusive of sales tax / use tax. The US customer doesn't actually pay $499 for an iPad, they pay $499 plus whatever the sales tax is, say 8% = $39.92. The merchant receives $499 + $39.92 and sends $39.92 straight off to the tax office.

    In the UK, the quote price (the price you see in an advert or in a shop) is inclusive of 17.5% VAT (value added tax). The UK customer hands over exactly the £429 on the sticker, not a penny more, and doesn't ow anybody any money afterwards. The merchant receives £429. £429 equals 117.5%, so the merchant pays 17.5% = £63.89 to the tax office and keeps 100% = £365.11.

    The difference in tax rates has nothing to do with Apple, so if we are talking about Apple's price strategy and not about living costs, we have to leave the tax out. So what we have to compare is the $499 exclusive tax in the US and the £365.11 exclusive tax in the UK. And that is with the current exchange rate about $40 difference. Your number makes absolutely no sense whatsoever.