I’ve read a lot of comments online since Apple announced it’s international iPad pricing, and most of those comments revolve around ‘Rip-Off Britain’.
Now it is true that must tech imported from the USA seems to cost more with this mythical international tax and at first glance the iPad pricing in the UK is a lot more but let’s break it down for the 16Gb WiFi iPad.
In the US this is $499. The UK price announced is £429. At a direct comparison at today’s exchange rates of 1.48, that comes to $648. Wow that seems an awful lot more. However that simply isn’t a fair comparison.
In the US all prices exclude sales tax which our friends in America accept is always added at point of sale and calculate the price in their head all the time. In the UK we have VAT so the tax is always added (and at the moment it’s 17.5%). So let’s take off the VAT from £429 and it comes to £365.
Convert that to USD and we see the UK iPad price is actually $540. So the UK iPad is actually $41 more expensive in the UK than the US… that’s a whole £27, although yesterday it was £25.
I’m sure there are some import taxes or costs and £27 more isn’t really a lot of money, sure I’d prefer not to have to pay it but it isn’t what I’d call rip-off Britain compared with the US price.
If anyone is to blame it’s the level of VAT we get charged in the UK.
If we compare our £429 iPad with VAT to what it costs, in say California with federal and local sales tax of 10.75% we see that in the US the iPad costs $552.64 which is £373.
So the entire reason we feel we are being ripped off for our technology is nothing to do with Apple in this case and everything to do with the Government and our VAT.
Of course importing it isn’t a solution either, because you did remember to pay your VAT when it came through customs didn’t you?