Last week’s UK Budget was no different to previous ones, as what the Chancellor gives in one hand he takes with the other. While we do not wish to get into politics, we can’t help mention how George Osborne could bring an end to the 99p per download for a song by closing a tax loophole.
There is to be a new law that will see digital downloads for music, movies and books are taxed in the country they are purchased in. This will mean for those living in the UK you will have to pay the 20 percent VAT, rather than the 3% or so in some other countries.
Osborne said he would bring this into force from January 2015, which could see the likes of Amazon, Google Play Music and iTunes take a huge hit in terms of sales, as there is a high probability that piracy could increase.
We cannot be certain how much you will have to pay for a digital download with the increased VAT price in the UK from 2015, but it could be around £1.16 per song or £11.69 instead of £9.99 per album.
It’s doesn’t sound like much at first, but if you download around two albums per week, then this could see you pay an extra £176.80 each year, which will just go to the Government for them to waste it on silly schemes.
We can understand that high street retailers will be happy with this move because it makes it much fairer, but not to consumers, as they are only looking for the best deal. It’s all very well these retailers saying they need to have a fairer system in terms of the amount of VAT people pay, but all they are thinking off are their profit margins and not their customers.
Do you think the increase in VAT for digital downloads could see a rise in piracy from next year?
Also See: iOS 9 beta 6 likely for testing partners