back to article Report: American tech firms charge Britons a thumping nationality tax

The nationality tax levied on Brits by our American cousins that design and sell technology has been laid bare once again in a mini study, and it makes for a molar-grinding read … for people living on this side of the pond anyway. A range of hardware devices were compared but the biggest differential in UK and US consumer …

  1. EddieD

    Tax????

    They don't fucking pay tax here!

    Nurse, my medicine!

    1. Peter Gathercole Silver badge
      Alert

      Re: Tax????

      They and their distribution channels do act as VAT collectors for the Government, though.

      They don't pay Corporation tax, as apparently they don't make any profit in the UK. As if...

      1. VinceH
        Coat

        Re: Tax????

        "They don't pay Corporation tax, as apparently they don't make any profit in the UK."

        In that case, they need to increase the prices - they're obviously too low.

      2. Kunari

        Re: Tax????

        They don't pay taxes in the US either, as they hide their profits overseas.

    2. ItsNotMe

      Re: Tax????

      "Nurse, my medicine!"

      Funny you mention medicine...because in the U.S....the cost of many medicines is much higher for U.S. citizens...than the exact same medicines...made by the exact same companies...in many other countries...such as Canada.

      So don't feel so bad...or alone...because there are plenty of U.S. & international drug companies screwing U.S. consumers.

      1. Rich 11 Silver badge

        Re: Tax????

        Funny you mention medicine...because in the U.S....the cost of many medicines is much higher for U.S. citizens...than the exact same medicines...made by the exact same companies...in many other countries...such as Canada.

        That's because the NHS and the like can negotiate bulk deals. If you Yanks had a proper healthcare system instead of one designed to bankrupt sick people, you might see a benefit too.

        1. Matt 21

          Re: Tax????

          I take your point and fully agree but I'm not sure I'd want to call the NHS a proper health care system. I suppose it is compared to the US though.

          1. Anonymous Coward
            Anonymous Coward

            Re: Tax????

            "I'm not sure I'd want to call the NHS a proper health care system"

            Really? What would you choose to compare it with then?

            http://www.commonwealthfund.org/publications/fund-reports/2014/jun/mirror-mirror

            Trust me when I say that it is only when you move overseas that you realise just what you really have with the NHS. Free comprehensive healthcare that enables you to purchase competitively priced private health (it has to be to sell) to suit your needs should you wish. The best of both worlds enabling you to not have to choose between treatment and food, health provision and selling the kids into slavery. It also enables the bullying of drugs manufacturers into offering reasonable prices - just check what the US and even Australia pays for some drugs. I'd take it over anything else. Sure, it needs some polishing and a kick up the arse every now and again as well as getting rid of poxy admin suits but it does the job.

            1. Matt 21

              Re: Tax????

              Can't say I agree. I've lived and worked in several other European countries and found the health care streets ahead of what we get in the UK.

              I could give loads of examples but here's just one. My uncle was diagnosed with skin cancer in the UK, I was abroad at the time and had a cyst. I was operated on within a week as a non-urgent case. My uncle in the UK had to wait three months.

              I could mention that in the UK I've had to wait a week or two to see my GP before now, whereas abroad I can always see my doctor the same day if I don't mind waiting.

              I can't comment on commonwealth countries as I've never used health service there.

              1. Mark 65

                Re: Tax????

                But was it free? Lots of EU states have good healthcare, although not measuring up in that report but they charge various explicit levies to fund it. How does that work in comparison?

              2. Geoff332

                Re: Tax????

                It does depend which EU country you were in. The more developed EU countries (Germany, France, Denmark, The Netherlands) all spend substantially more on healthcare per capita (not to mention the private contributions through compulsory insurance).

                The countries from the original EU that spend less are places like Spain, Italy, and Portugal. Then the newer EU members - which have different cost structures (i.e. they pay less) and have lower life expectancy (healthcare costs go up exponentially as you age).

                When you look at all sorts of quality of care measures, then the NHS tends to be middle of the range. Not the best, but certainly not the worst. Obviously there are some things it does better and some it does worse than other EU systems.

                Overall, it seems like the NHS is underfunded, but provides pretty good care when you take that into account, meaning it's a reasonably efficient system.

            2. Anonymous Coward
              Anonymous Coward

              Re: Tax???? - (and Tax Farming ...look it up on wikipedia)

              Never done the comparison vs the UK, but I've heard the price Australians pay for medication that is on the PBS (Prescribes Benefits Scheme), is pretty damn good, never paid more than $15 for stuff that I've been told would otherwise have cost hundreds. I've also heard that on a per $ basis the current Australian medical system delivers more benefits than almost anywhere else in the world.

              If having the most expensive iPAD's and Cokes in the world is the price I have to pay, then so be it, but I still think it stinks, and once a decent alterntative turns up, I'm taking it. For example Australia is one of the least expensive places to buy a Golf GTI, so it's possible to get a decent global price from a quality manufacturer.

              I've seen the justification of the uplifts, sometimes it stacks up, e.g. to import clothing into Australia legally with all taxes adds about 30% to the wholesale price, when you add the 120% retail markup to that, (clothing is a horribly risk industry, so the markup believe it or not is justified, as you have to purchase stock 6-8 moths ahead of time and wear the risk of not being able to buy more of the good sellers or and take the hit on the stuff nobody likes, and fashion is a fickle fickle beast which is hard to predict) that 30% tax turns into a 65% difference in the retail price. That's before you factor in the money you pay to customs agents, shipping, risks for currency variation and the other costs that are absorbed by US and Asian based retailers who ship direct, don't pay taxes (that pay for things like the PBS), and are able to dump excess stock becuase they pay their staff crap wages and because the incremental cost of sale is negligible.

              Having said that, none of those things apply to Apple, or Google, or Amazon or Warner Brothers or sellers of purely digital goods. They rake excess margin because of their de-facto monopoly positions, and because retail customers have been "educated" to pay more because of legitimate factors that affect other retailers (like the ones I described above). In short many of them are acting like complete pricks.

              Maybe if more of the "excess profits" went to the people who actually produced the goods in developing nations, or to local employees who actually added some value this would be more forgivable, but these decisions are made by people who only see numbers, accountants, CFO's and their short-term thinking hedge fund masters.

              Don't blame the local employees of these companies, they probably hate the uplift as much as you do,. The ones to blame are the people benefiting from the the current incarnation of the financial system (the one that screwed everything up in 2008/2009) that has stopped being able to pull money out of you via government subsidized (ie by you via your tax), support programs, and now intends to screw you via any other means necessary. The fact they can do it outside of a country that might hold them accountable, just makes it that much easier.

              Part of me cant wait until either Euro or Asian companies give me a decent viable alternative.

              Signed

              Angry of Mayfair.

              (Anonymous Coward)

              1. Anonymous Coward
                Anonymous Coward

                Re: Tax???? - (and Tax Farming ...look it up on wikipedia)

                Trouble is, lots of important medicines are not on the PBS. Been several cases cited on TV recently about drugs that have real measurable benefits as opposed to "in some cases" but they are not available. Being cheap on PBS is fine if it is on the PBS. PS Australia is bloody expensive for healthcare and just about everything else. Alcohol, food, clothing, you name it. I can buy clothes made in China cheaper in the UK than in Australia, and often of better quality and likely off of the same production line. Go figure.

          2. Northumbrian

            Re: Tax????

            I take your point and fully agree but I'm not sure I'd want to call the NHS a proper health care system. I suppose it is compared to the US though.

            Well, soon you'll be able to see how it compares to US norms. Once TTIP (the transatlantic trade and investment partnership) is signed, without an NHS opt-out, large healthcare companies as well as outsourcing giants like Cerco, will be able to buy up the NHS and run their fiefdoms exactly like US hospitals, clinics etc. We will have no way of taking them back into public ownership and - quite probably - no way of avoiding the need for private healthcare insurance, along the lines of that provided by Unum etc.

            Our government is quite happy to relinquish any control over healthcare costs and procedures in this country to multinationals and an international tribunal set up to protect said multinationals. So much for guarding our "sovereignty".

  2. Preston Munchensonton
    Black Helicopters

    No justification?

    I would be curious to examine items imported from the US but through a third-party instead of the OEM. I would expect that the price differences would be similar, given the difference in market sizes and the potential for exchange rate effects, but that's just a guess.

    On the other hand, it is entirely possible that a world-wide conspiracy has set about to inflate the cost of US goods into the UK purely to soak Brits. I'm convinced now. I take my prior statement back. Off to the bunker...

    1. Anonymous Coward
      Anonymous Coward

      Re: No justification?

      Very good. Not sure about the market size though as the EU is much bigger than the US.

    2. Anonymous Coward
      Anonymous Coward

      Re: No justification?

      I would be curious to examine items imported from the US but through a third-party instead of the OEM.

      Difficult for a number of big name brands. See Levis for example - they'll sue you if you try to import their overpriced jeans yourself.

    3. Anonymous Coward
      Anonymous Coward

      Re: No justification?

      > I would be curious to examine items imported from the US but through a third-party instead of the OEM.

      Well, the MacBook, iPad and iPad mini my company recently purchased had their tracking start at Shenzen, China, not the US.

      So the question really is why would importing from China to the US be so much cheaper than importing from China to the UK.

  3. TRT Silver badge

    I think...

    that you have to compare the US ticket price with the UK ex VAT price, rather than the amount punters have to shell out. In the US & Canada, you pay the ticket price plus regional and federal sales taxes, in the UK our ticket price generally includes VAT.

    Then you have to convert to dollars at the prevailing exchange rate to make a useful comparison.

    I wonder how UK manufactured goods compare? Do we have any consumer tech exports?

    1. Tom 38 Silver badge

      Re: I think...

      US sales taxes can be avoided or minimized by choosing where you purchase something from though.

      I think the interesting point is that we would know precisely how much we were getting ripped off if the grey channel was not considered illegal. As it is, we just have to take whatever price the company sets us, or sets its disties.

      1. L05ER

        Re: I think...

        That's only half true...

        businesses collect sales tax on anything purchased in your state, or from a business with a location in your state. The percentage varies by state.

        Even then... You are compelled to pay that tax at the end of the year, via a box on your state tax forms.

        it would be a mistake to think your govt is more adamant about collecting taxes.

        1. Tom 38 Silver badge

          Re: I think...

          businesses collect sales tax on anything purchased in your state, or from a business with a location in your state. The percentage varies by state.

          Even then... You are compelled to pay that tax at the end of the year, via a box on your state tax forms.

          it would be a mistake to think your govt is more adamant about collecting taxes.

          On out of state purchases, the consumer is supposed to pay a "use" tax and pay it at the end of the year. Would you think it is accurate to say that 100% of this revenue is reported by each consumer and remitted in full to the IRS each year?

          1. Irony Deficient

            Re: I think…

            Tom 38,

            On out of state purchases, the consumer is supposed to pay a “use” tax and pay it at the end of the year. Would you think it is accurate to say that 100% of this revenue is reported by each consumer and remitted in full to the IRS each year?
            no, it would not be accurate to say that. Anyone who pays use tax knows that it is remitted to his state’s taxation department rather than to the IRS.

          2. L05ER

            Re: I think...

            of course not, that would be naive...

            you painted a picture of a very lax attitude toward tax collection here in the US, i was simply pointing out that we all have taxes we are supposed to pay, but avoid at times (or as much as possible, whatever).

            i have never heard anyone use the justification of "no sales tax" when deciding to order online. it's always : availability, base price or ordering direct from the manufacturer.

            generally, shipping negates most potential tax savings... a $400 item would be $28 in sales tax in my state. if i overnight it... it would cost considerably more than the gas it takes to drive to the store AND sales tax combined.

            if you want any support for your high dollar purchase, you buy from a retailer you can take it to...

            it's just not that easy anywhere to "beat the system" plain and simple. can it be done? yes. is it rampant? hardly.

      2. Alan Brown Silver badge

        Re: I think...

        "I think the interesting point is that we would know precisely how much we were getting ripped off if the grey channel was not considered illegal"

        It's explicitly NOT illegal to buy in mainland europe and it's often substantially cheaper even with shipping on top.

        I've had a number of UK "exclusive distributors" bluster at me about "You can't do that" and had them go remarkably quiet when I point out that should they try to prevent me (or my employer) from doing so they'd be facing legal action for breaches of the rules regarding the single european market.

        IANAL but my opinion is that "exclusive distributors" are probably illegal under EU competition laws.

    2. Anonymous Coward
      Anonymous Coward

      Re: I think...

      "I wonder how UK manufactured goods compare? Do we have any consumer tech exports?"

      Best comparison I can see is for Dyson. A DC40 Animal at Walmart is $407.66 (inc tax) where as at Asda it is £367 (inx tax). So the US are saving over $200 compared to us (according to open exchange rate).

      Given that Dyson is a UK company it's shocking to see it so much cheaper in the US, especially considering they are being sold by effectively the same company!

      1. TRT Silver badge

        Re: I think...

        Dysons are all made in Malaysia now.

        1. Anonymous Coward
          Anonymous Coward

          Re: I think...

          "Dysons are all made in Malaysia now."

          That info actually makes the comparison even more valid, because macbooks are all manufactured in China.

          1. Scroticus Canis

            Re: I think... Far East manufacture there you have it

            Much cheaper to ship stuff to the States across the Pacific than send it to Europe across the Indian Ocean, around southern Africa and up the eastern Atlantic, less pirates too. Probably shipping larger volume to the States as well.

            Another factor is the EU directive that such goods should last 3 years against the one year nominal warranty. Got to recoup that extended warranty loss some how.

            As a by the by New Scientist is a UK magazine but it's cheaper to subscribe to it in the States, according to the prices quoted on their website, don't know how the various taxes in the USA affect the final price though.

            1. Stephen B Streater

              Re: I think... Far East manufacture there you have it

              I looked at getting New Scientist for my brother in the US. The price did look cheaper at first glance, but the small print meant you needed a minimum twelve month subscription (several months longer than his trip) and a credit card direct rolling debit, which I never get round to cancelling on time. There was no fixed term sub. So I never got him the "cheaper" US version.

            2. Alan Brown Silver badge

              Re: I think... Far East manufacture there you have it

              "Much cheaper to ship stuff to the States across the Pacific than send it to Europe across the Indian Ocean, around southern Africa and up the eastern Atlantic, less pirates too. Probably shipping larger volume to the States as well."

              It's even cheaper+faster to load it onto a train and have it arrive in a marshalling yard in germany 2 weeks later.

              The reason we're seeing supercontainer ships on EU runs is largely because it's the only way to bring prices down enough to compete with railfreight - right now thet volumes passing over the EU-russia-china line are modest but they are increasing all the time.

              1. jason 7

                Re: I think... Far East manufacture there you have it

                I think I was told it costs around 50p to ship a TV from China to the UK. However it costs many time more to to get it the 150 miles from the Cargo port to the distribution warehouse.

      2. hplasm
        Unhappy

        Re: I think...

        Many moons ago on a trip to the US, a friend of mine was outraged by the $ price of trainers being half of what he had just paid in £.

        The trainers were made in the UK (those were the days) just around the corner from his house.

        Not impressed- considering they had to be sent over the pond...

        1. Richard Jones 1
          Flame

          Re: I think...

          An interesting comment on trainers. Some years ago, more years ago than I like to remember my wife and I both bought some as walking shoes for a relatively few dollars while in Washington DC. I do not remember the name of the maker, but it was no one famous . They lasted us for years. Never been able to buy anything with a similar lasting quality since. 12~24 months and they are clapped out. UK ones are all damned expensive someone is making far more than they should.

        2. Tom 35

          Re: I think...

          My dad used to pickup train cars loaded with new cars being shipped from Canada down to the US, cars going all the way to Florida or Texas still had sticker prices thousands less then the same car sold across the street from where it was assembled.

          When the Canadian $ went down, book prices went up (even when printed in Canada), when the Canadian $ went back up, prices didn't drop at all, but they did stop printing both the US and Canadian price on the books.

          They just charge as much as they think they can.

          1. Anonymous Coward
            Anonymous Coward

            Re: I think...

            "They just charge as much as they think they can."

            This was true, is true and always will be true. It will never change.

            The UK peeps get charged more because we're willing to pay more. No other reason is necesary.

            1. TRT Silver badge

              Re: I think...

              Has anyone mentioned TTIP yet?

      3. jason 7

        Re: I think...

        I remember years ago on the Money Program there was an investigation into this and they interviewed Rover who proudly boasted they could sell a Rover MG sports built in Britain for considerably more than they do when they ship them to Hong Kong.

        Richard Branson also though it hilarious that CDs he manufactured in the UK sold for nearly half the price in the US. Thanks Richard.

        My other half worked for a electronics firm that actually made components in the UK. Their pricing was purely based on "how much we know we can get away with!" So the US got a part for 10p a pop whereas the UK firms would have to pay 50p.

        Adobe has always maintained the difference in cost for the UK and US versions of their products was due to 'language issues'.

        Really just need a UK wide campaign to 'Stop buying over-priced crap!" for a month.

    3. Phil O'Sophical Silver badge

      Re: I think...

      you have to compare the US ticket price with the UK ex VAT price

      Exactly. The figures given in the article are exaggerated, and seemingly chosen to give the worst impression

      The UK Kindle Fire that costs £329 in the UK is the entry-level HDX 8.9" (including special offers). Before VAT that works out to £274, or $468 at current rates.

      The current US price is $379, so the UK price is 23% more, not 39.5% as claimed.

      If, instead, you compare the top-end 64GB/4G one, the prices are $625 (UK) versus $594 (US), which is only a 5% difference.

      Do we have any consumer tech exports?

      Even if we do, they're probably made in the same Chinese factories as the US "exports".

      1. aahjnnot

        Re: I think...

        Which? published a table, not shown in this article, that compares pre and post tax prices in the UK and the USA. Their research didn't fall into the obvious trap that you describe but, unfortunately, this article cites the price difference including California sales tax at 8.41% and UK VAT at 20%; this is hardly an apples to apples (if you'll pardon the pun) comparison.

        In any case, the pre-tax prices all showed very significantly higher costs in the UK. The Telegraph has published the table, btw.

      2. airmanchairman

        Re: I think...

        The truth may be that the UK Mercantile Class is much greedier than it is Stateside, and can get away with price gouging much more easily

        And, for my money, the people here are more accepting of such anomalies, instead preferring to "curse the darkness rather than light a candle".

  4. Yet Another Anonymous coward Silver badge

    Shipping costs

    If it is cheaper to fly to New York, buy a Macbook and fly back then that is obviously how they import them. But they have to pay the time of their staff to sit on transatlantic flights for 8hours

  5. rh587 Silver badge

    What TRT said.

    A 13-inch Macbook is indeed:

    £1499 on the UK store

    $1799 on the US store, which equates to £1054 today on xe.com.

    However, that £1054 is sans-tax. After normalising it with UK VAT, that £1054 becomes £1265. So there's still a £250 (16%) premium for living in blessed Blighty, but one does need to be careful whether you're comparing against America's tax-free online sales, or against local sales tax, which in most states is less than 10%, compared to our VAT rate of 20%.

    I did once hear the UK referred to as "Treasure Island" by someone working for a US consumer electronics company. We're known for apparently being prepared to pony up premium prices.

    1. YetAnotherPasswordToRemeber

      I've recently come back from the States and bought a Galaxy Tab over there. I paid ~$320 over there including tax, so around £200 at the time + £5.50 credit card charge. The same tablet over here was £320, so the old tale of just replace the currency symbol for US to UK pricing seems to hold!

  6. Fibbles

    I've no doubt that tech firms charge us more (because the market will bear it etc) but if you've ever tried to import something into the UK you'll know that HMRC takes a ridiculous amount of tax.

    1. NumptyScrub

      HMRC charge a buttload of duty if you import things through all the proper channels, yes (20% VAT plus at least 5% extras, IIRC). If however you just set off on a 1 week "vacation" and buy some stuff while you're there (like, say, a Macbook or iPhone), then bring it back unboxed and obviously used, you pay approximately nothing extra. At least that has been the experience of several friends of mine, anyway.

      The fun part comes if you try to take defective US kit to a UK retailer for repair... :/

      1. TRT Silver badge

        There's a limit of £390 on personal import of other goods, £135 on postal import. So if you buy a MacBook overseas, you are supposed to declare it and pay the duty.

      2. Anonymous Coward
        Anonymous Coward

        An acquaintance used to go on regular trips to the US and bring back a couple of vintage US made guitars each time. He never declared them on his return, and promptly sold them for considerably more than he'd bought them for.

      3. Thomas 6

        Re:The fun part comes if you try to take defective US kit to a UK retailer for repair..

        I bought a pair of Uggs for my girlfriend in New York a few years ago. Pretty much the first time she wore them she scuffed her toe on the curb which made a hole in the boot.

        We got in touch with Ugg in the UK and they arranged for a free replacement with no fuss. We did buy them from the actual Ugg store rather than a reseller though so not sure if this made a difference.

  7. Anonymous Coward
    Anonymous Coward

    It's common practice for US companies to assume a 1:1 exchange rate.

    What they sell for $1000 in the US, they sell for £1000 in the UK or €1000.in Europe.

    I can't decide whether it's blatant profiteering

  8. cynthb

    Welcome to the club. US companies have been grossly overcharging Canadians for generations.

    1. Magani
      Pirate

      @cynthb

      Ditto for Australia.

      We've even had a government enquiry into the blatant ripoff merchants with the main culprits being Microsoft, Apple and Adobe. When asked to explain themselves, some even had the temerity to offer 'transport costs' for downloaded software, and 'language differences' as reasons for inflated prices.

      Bunch of robbers.

      1. Alan Brown Silver badge

        Re: @cynthb

        "Ditto for Australia."

        It's even worse for items - such as books/magazines - which are published in the USA but get to Oz/NZ via the UK

        They generally arrive 2-4 months after the cover date (bearing in mind that magazines are on sale in the USA 2 months before their cover date) and costing 3 times as much.

        The global book publishing copyright/distribution cartels are still in rude health.

        1. Anonymous Coward
          Anonymous Coward

          Re: @cynthb

          Ditto for Ireland.. and some. Disgusts me that with the Euro mark up on most items that come via the UK resellers/wholesellers, we end up paying more than those in the UK - who in turn are paying more than the US......

  9. Steve Knox
    Trollface

    Simple Solution

    Devalue the pound.

    1. ShadowedOne
      Trollface

      Better Solution

      Orbital strike on Wall St (and all the HQs of the various and sundry greedy companies)

  10. Chad H.

    >>>>Which? found that US punters were paying around 30 per cent less for a MacBook Pro - £1499 in Blighty against £1144.

    Going to go on a limb and guess they didn't compare apples with apples... Specifically including our 20% VAT but excluding US sales tax.

    That leaves the difference not very much at all.

    1. Jay 2

      Do some maths!

      Wrong! Back in April I was in Las Vegas on holiday, so before I went I did some research on MacBook prices. Below is my workings for US price + 8.1% sales tax then thrown through the exchange rate of the day. I think the difference in the region of £200 or more in each case speaks for itself...

      MBA 11" (1.3GHz, 4GB RAM, 128GB SSD)

      £849

      $999 + $81 (8.1%) = $1079 = £654

      MBA 13" (1.3GHz, 4GB RAM, 256GB SSD)

      £1129

      $1299 + $105 (8.1%) = $1404 = £851

      MBP 13" (2.4GHz Retina, 8GB RAM, 256GB SSD)

      £1249

      $1499 + $121 (8.1%) = $1620 = £982

  11. GBE

    Price isn't based on cost

    Price in a particular market isn't determined by cost of manufacture, cost of shipping, or the price in some other market.

    Price is determined by what people are willing to pay for something.

    Apparently Brits are willing to pay more.

    Stop buying MS Office, and the price will go down.

    1. g e

      Re: Price isn't based on cost

      uk.gov just did that...

    2. The Mole

      Re: Price isn't based on cost

      But supply should be based on cost, and if there is a large differential between cost and price then supply should go up, driving down cost until they balance out.

      Unfortunately we don't have a pure market and it is artificially distorted - one of the most significant being the restrictions on 'grey market' imports.

  12. Anonymous Coward
    Anonymous Coward

    "Apple said exchange rates, local import laws, biz practices and tax were at play"

    It's that little one tucked in there that probably accounts for the majority of the difference, for all the companies examined; "biz practices".

    But who should we blame? Them for being bastards or us for being schmucks?

    Anyway, America won't be with us for much longer so we may as well let it enjoy what it does best while it can.

    1. g e

      Won't be with us?

      So they'll be against us...

      No change there ;o)

  13. Anonymous Coward
    Anonymous Coward

    One idea...

    One way to fix this would be to establish your own companies and charge US people more for stuff. Of course, that means you have to have a competitive work force and make a product that people want to buy...

    1. earl grey
      WTF?

      Re: One idea...

      I have found several tools (at eye-watering prices) on UK web sites and even if willing to purchase (I was); they weren't willing to ship. Even common, every-day hand tools that should be more reasonably priced are not.

      Somebody tell me what's up with that? It can't be exchange rates. Is it just gouging in a controlled or smaller market?

  14. Tom 7 Silver badge

    Easy to explain

    Managers in the UK are grossly overpaid and inefficient and that accounts for the 30% extra cost.

  15. Anonymous Coward
    Anonymous Coward

    "more than double the price"

    "with Microsoft Office Pro more than double the price here versus there.

    Consumer site Which? found Microsoft was touting the top version of Office for £390 but in the US the same software was going for £236, over 62 per cent more pricey."

    So was it more than double the price or was it 62 per cent more pricey?

    Inquiring Minds want to know!

    Microsoft Office Professional 2013 (1PC/1User) [Download]

    http://www.amazon.com/Microsoft-Office-Professional-1User-Download/dp/B00B1TGQCA/

    http://www.amazon.co.uk/Microsoft-Office-Professional-1User-Download/dp/B00DRP4Y48/

    $399 vs £324.32(incl VAT).

    $399 is about £281 when you include VAT, but ignore currency exchange costs (in other words, your credit card company will card you 2-3% extra to spend $399 on your GBP credit card), and it's close to the widest currency gap in the last 6 months.

    So there's still a 12%-15% price premium in this case, but that's a long way from "more than double the price".

    Weirdly, you can buy just the license "key card" from Amazon in the US for only $280 (about £205 including VAT), but that probably tells us more about the futility of comparing the price charged for software than about transatlantic

    And while we're at it, the Euro price on Amazon.de is 420 Euro, which is slightly more than the UK price, even though VAT in German is only 19%

    http://www.amazon.de/Microsoft-Office-Professional-2013-Download/dp/B00AWVNQN0/

  16. Dan Paul

    Just a cost of doing business...

    God knows, the sheer cost of all the legal, governmental and financial obligations that the UK or EU put on an American company have got to be worth something extra. Also your money is worth more in your country than the US because there is usually another 5% fee for currency exchange from pounds to dollars here that affects some transactions. A credit card fee for International transactions from different banks may have applied as well and that could have been a good 8% extra.

  17. Anonymous Coward
    Anonymous Coward

    This is still a thing?

    This isn't a new "complaint" and I honestly can't grasp that people are complaining about this sort of thing. The situation has been like this for YEARS and it's all just headline grabbing yarbles.

    If you don't like paying 20% tax on every item, then tell the UK Government! As people have already said, this isn't an "apples for apples" comparison, because US sites and stores don't list prices *inclusive* of Sales tax. And you can't *not* pay it: every online sellers charges sales tax, as do all brick and mortar stores (based upon where you live) and if you live in Washington State (has Sales tax) and you buy something in Oregon (no Sales tax) you're supposed to declare it at the end of the year.

    When I first moved here (from Blighty) I would often get caught out at the cash register, but at least I had a clear grasp (eventually) as to how much tax I was paying. The UK consumer has the tax hidden from them - I wonder why?

    Granted, the US typically pays a lot less tax but whose fault is that? Yep, the UK electorate. Don't let them get away with it! Do you honestly believe that 20% VAT is appropriate? On top of your income tax? And road tax? And Stealth taxes?

    If it makes you all feel a little bit better, the US is currently going through "Gas Price Conditioning". Prices for petrol are creeping up, and the media interviews with people who can "barely afford to run a car now" and "I have to really consider my journeys these days" have begun. Sound familiar?

    1. Gordon 11

      Re: This is still a thing?

      The UK consumer has the tax hidden from them - I wonder why?

      Most (all?) of my receipts list VAT as a separate item, so it's only hidden if you choose not to look.

      And I can work out 1/6th of something in my head anyway.

    2. veti Silver badge

      Re: This is still a thing?

      Believe it or not, you're not the only person who's thought of that. Yes, someone has done those sums too.

      Turns out that once you allow for VAT, there's still a substantial gap. Not *as* substantial, obviously, but still well into double-digit percentages.

      Why do you think the US tech industry lobbies for export restrictions on its own goods?

      You're welcome.

    3. Anonymous Coward
      Anonymous Coward

      Re: This is still a thing?

      Not really, diesel has been getting cheaper! Cheers!

  18. Cynic_999 Silver badge

    Nothing new about different pricing in different countries. Where cost of production is not a major percentage of the selling price, the pricing generally reflects the cost of living of the country in which the goods are sold - as do salaries. Comparing prices in two countries by using the banking currency exchange rate is extremely misleading - it would be more fair to use an exchange rate based upon average salary. So price everything as a percentage of the average salary and see how those figures compare. The prices of an average weekly shop in a Brazilian supermarket is ridiculously cheap compared with the UK if you use the exchange rate, but not if you use % salary.

  19. Barrie Shepherd

    BIgMac comparison

    When comparing product cost between countries it may be better to compare in BigMacs i.e. the local price of the product divided by the local price of a BigMac. :-)

    http://en.wikipedia.org/wiki/Big_Mac_Index

    Problem is easily getting the daily cost of a BigMac (without visiting an outlet) is not easy as they have not yet got onto the financial commodity market lists.

    1. Lamb0
      Pint

      Re: BIgMac comparison

      For many years one of the easiest, simplest, and fairest of changing a bit of folding money into the local currency outside the US has been to buy a bite at MickyD's - at a better exchange rate than the banks.

      Though when I lived in Germany my personal preference was for the McRib. ;<)

      For some reason the McRib is usually rather hard to find here in the states where pork in relatively inexpensive... however, even though due to the drought the price of beef has skyrocketed; the Big Mac's price has changed little. ?!?

      A beer an a bite ought to go together... even if they're not sold together!

  20. Irony Deficient

    one more time, with gusto

    Along with VAT being included in UK prices vs. sales tax excluded from US prices, another reason for the UK vs. US price difference is the coverage provided by the Sale of Goods Act 1979 (as amended) in England, Wales, and Northern Ireland, and by the Sale of Goods Act 1982 (as amended) in Scotland. The warranty which the seller provides in the UK has to be paid for somehow, and that somehow is through a higher retail price. Note that there is no mandatory seller’s warranty in the US; but if a seller decides to offer a warranty, then legislation (e.g. the Magnuson-Moss Act) governs it.

    1. karlp

      Re: one more time, with gusto

      Indeed. People miss how big of an issue this is.

      I had a machine, maybe 30 months old that died. The problem was known to the manufacture. There had actually been a public recall about it shortly after it was made. But they didn't widely advertise it and I didn't become aware of it. The product died and I went online to see if anyone else had similar issues and saw the recall.

      I contacted the company and they wouldn't do anything about it. They said that the time window had passed and while they would be happy to fix it (at 50% of the cost of a new one...) there wasn't anything more they would do.

      This whole scenario wouldn't have happened in the UK, or at very least, I wouldn't have been left with a dead piece of kit.

      That said, the people who bought it in the UK paid 18% more for it, so at least it bought them something.

      Whether that is a tradeoff I would want for myself long term I still haven't decided.

      Karl P

  21. Anonymous Coward
    Anonymous Coward

    Market forces

    If you want cheap Apple products go to Hong Kong or Japan. You will save as much as one third of the price in the UK. If you're sceptical look up prices for the iPhone 5s on the Tokyo Apple store and divide by 170 for the rough £/¥ conversion.

    Back in the UK; goods are worth whatever the market will bear. No one needs a Mac Book, or MS Office, they choose to purchase one for its advantages over a PC laptop or Open Office. If you want the shiny you'll have to shell out.

    If you're more interested in what you can do with the tech' that you are buying than the label on the box, then this probably does not affect you.

  22. InsaneGeek

    Hello, cost of living difference???

    The UK minimum wage is £6.50 and US is £4.25, a difference of ~35%, rent prices are ~21% higher in the UK, the consumer price index (excluding rent) in the UK is ~30% higher than the US... Why would anybody think the UK and the US have the exact same purchasing power and expect there to be price parity between the two. Workers make more in the UK than the US, so the prices will be higher for similar things, you are not getting screwed over because you can buy something in another country for less; but if you really feel that way move there and take the pay cut only to find out that at the end of the day your buying power didn't really change.

    http://www.numbeo.com/cost-of-living/compare_countries_result.jsp?country1=United+States&country2=United+Kingdom

  23. JaitcH
    FAIL

    Whatever the suckers will pay ....

    Most US companies discount when they hit Developing countries or China be it software or hardware - in fact it seems that 'piracy' or copying is even more profitable as some companies will actually swap out your 'hot' software for a copy of the real product for either nothing or a very small fee.

    The EU seems to be very gullible when it comes to comparing US pricing, mind you the fact that VAT is included makes calculations a little harder. Tax should always be shown separately so help consumers compare prices. Apple has always been a prime example of ripping people off, then selling extended warranties even in countries where the mandated warranty is two years.

  24. Huckleberry Muckelroy

    I have noticed the price difference between the UK and US tech gear as long as I have been reading The Reg. I am a Yank, and a pro hardware geek. Maybe you should look at your own tax and tariff structure. If the price diff were simply a matter of business, competition would have knocked prices low a long time ago.

  25. john devoy

    They've always used the same lies to excuse it; Adobe were honest about it a few years ago, they charge a lot more in the EU...because they get away with it.

  26. Jagged

    One thing worth mentioning is that while the law on grey imports may work against the consumer, here is legally no such thing as grey imports within the EU.

    I bought my (very old now) Sony TV online and picked up a Spanish model for less than half the price of the UK equivalent. The only difference between the two was the model number. The Spanish model even defaulted to English menus.

    1. Tom 38 Silver badge

      This is true, if only somewhere in the EU made things.

  27. The elephant in the room
    Pirate

    Overpriced software?

    There's a crack for that.

  28. Daedalus Silver badge

    This is not new...

    Let's face it, for a long time not many people ever got a chance to compare US and UK prices. I did, starting back in 1980. The rule was simple: take the price in dollars, replace dollar sign with pound sign, that's the price in the UK. It applied mostly to electronics where you could compare like with like in the brand dept, even with Radio Shack/Tandy and their Realistic lines.

    Back then I simply blamed the UK commercial structure: monopoly monopoly monopoly. Limited suppliers, limited retailers, controlled imports.

    Sounds like not much has changed.

    Anybody remember Comet, with their "we'll advertise it but we may not have it" policies?

  29. xyzw

    The reality of prices..

    First, Brits and Euro citizen are usually happy to pay more.

    Then, there are a lot more consideration... (I have been there a few year ago, so, let me try to remember...)

    When comparing the prices you must make sure you do not compare US price before sales tax versus the UK/Euro price with VAT. It's ~20% of the difference you can explain.

    Then, you have other tax cost (like local tax office charging vat or taking a cut of your profit before shipping the rest abroad, etc). Maybe around 5%, but it really depends on your legal setup.

    Then, you also a problem of harmonization or prices in the Euro+UK zone. The consumer see the final price, but VAT varies between 15% and 25% in Europe, so, you adjust your Euro price, so all customer sees the same price, but you protect your profit margin.

    With the UK at the top of that, you set a price for a year, estimating roughly (with a margin) what will be the parity of the currency against the bigger Euro market (because consumers usually compare at product launch the cost, usually the current spot rate, without considering VAT etc).

    Eventually, you can add other costs:

    - mandatory translations (depends on countries),

    - ratings,

    - compliance tests (e.g. electrical).

    etc

    All you see as a parent company is a profit margin you'd like to make per product, so, you adjust the sale price in function of those numerous "extras".

  30. James 100

    I saved a few hundred on this laptop last month by buying from Italy (then gained a few hundred more, because they'd accidentally shipped me the Italian keyboard layout, then offered me a choice between swapping for the right layout or getting another 20% refunded!) - it certainly pays to shop around.

    Some of the excuses for gouging are just silly though. Languages, when most companies just sell the US version in the UK anyway?! (Or indeed ship multilingual systems regardless: the US version of Office has the same set of English dialects as the UK one, both can spell-check either dialect.)

POST COMMENT House rules

Not a member of The Register? Create a new account here.

  • Enter your comment

  • Add an icon

Anonymous cowards cannot choose their icon

Biting the hand that feeds IT © 1998–2021