iPad UK Pricing Confirmed; Apple UK Tax Applied

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.

Comments

The OP forgot VAT.

[Dzimas]

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???

Re:The OP forgot VAT.

[MoonBuggy]

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.

Re:The OP forgot VAT.

[MoonBuggy]

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%

EU/UK vs. American Pricing

[tlhIngan]

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.

But your U.S. prices do not include tax

[SuperKendall]

£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.

Re:But your U.S. prices do not include tax

[godawful]

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

Simple math is obviously beyond you...

[Space cowboy]

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.