So why are us Brits getting screwed over once again?

[rob_simple]

I've never really understood how the government squares away import taxes like this. From the very brief dalliance I had with economics at college, my understanding was that high taxes are levied on imported goods to encourage us Brits to buy homegrown products (you know, bolster that Great British Industry that's totally still a thing...)

So that would make sense if there was absolutely any kind of competing video game industry in Britain and we could buy British consoles, but there is no British console industry so essentially we're just being punished for living in Britain.

Like I say, I don't understand economics --as well as suffering from generally being a bit thick-- but is that about the size of it?

 

[Little Gray]

I've never really understood how the government squares away import taxes like this. From the very brief dalliance I had with economics at college, my understanding was that high taxes are levied on imported goods to encourage us Brits to buy homegrown products (you know, bolster that Great British Industry that's totally still a thing...)

So that would make sense if there was absolutely any kind of competing video game industry in Britain and we could buy British consoles, but there is no British console industry so essentially we're just being punished for living in Britain.

Like I say, I don't understand economics --as well as suffering from generally being a bit thick-- but is that about the size of it?

You are both right and wrong. Import taxes exist to help bolster homegrown products as well as to try and keep jobs inside a country. If somebody wants to exploit cheap labour in China instead of having it build in the country then they will have to pay the import taxes. I am not actually sure what the import taxes would be on video games and their might not even be any but thats how they work in general.

 

[IndieForever]

The maths are little bit out on this one so far and it's not as bad as it first appears for the UK.

The pre-tax price for the PS4 in the USA is $399 which is £256. The pre-tax price in the UK for the console is £291, or $453 (£349 / 1.2). The difference is £35, give or take, most of which will be absorbed by the higher costs that retail businesses face in the UK compared to the States (fuel, warehouse space, business rates etc., etc.). I imagine the retail margin on the console is pretty much identical between the two countries.

There is also currently no import tax (as opposed to VAT) on games consoles from China. Sony will also have to hedge against currency fluctuations as they can't keep chopping and changing the price every time a currency moves against another.

Compared to some of the prices I've seen posted above from other EU countries, I don't think there's any reason to complain about Sony's UK pricing. If you want to complain to the government about taxes, I think there are better places to start.... VAT (intended for luxury goods) on electricity and heating fuel anyone??!!

 

[rob_simple]

I've never really understood how the government squares away import taxes like this. From the very brief dalliance I had with economics at college, my understanding was that high taxes are levied on imported goods to encourage us Brits to buy homegrown products (you know, bolster that Great British Industry that's totally still a thing...)

So that would make sense if there was absolutely any kind of competing video game industry in Britain and we could buy British consoles, but there is no British console industry so essentially we're just being punished for living in Britain.

Like I say, I don't understand economics --as well as suffering from generally being a bit thick-- but is that about the size of it?

You are both right and wrong. Import taxes exist to help bolster homegrown products as well as to try and keep jobs inside a country. If somebody wants to exploit cheap labour in China instead of having it build in the country then they will have to pay the import taxes. I am not actually sure what the import taxes would be on video games and their might not even be any but thats how they work in general.

If that's the case though, and Sony are having the consoles made in China, wouldn't that mean the US should be getting hit with an equally high price?

I assumed the consoles were being built in the US, for some reason, but assuming both the UK and the US will be importing the consoles why are the Brits getting hit with a higher price?

I'm guessing it's something to do with us having a higher import tax than the US, meaning Sony would have to reduce their profits to match their US price, and given everything else they're currently doing right I guess I can square that away, but it still sucks we're paying an extra hundred quid.

 

[Agayek]

Not exactly true, The negiboring countries DO have the same 'problem' and the european price translates to £340, a mere £10 cheaper. It would cost dozens of times that much money to get to calais and back from pretty much anywhere in the UK. Oddly enough, it's actually £332 in Australia (the cheapest of the PAL territories for the first time ever ever) but again, importing it wouldn't be even remotely worth the effort.

Oh well, VAT is totally worth it in my eyes.

Ah, there goes my lack of reading comprehension. For whatever reason, I was seeing that comparison as between the (rest of the) EU and the UK, not the UK and the US. Oh well.

And yea, after taxes, folks in the US will be paying anywhere from $425 to $450 depending on the state. Not sure what exactly that translates to in your bright and colorful monopoly money, but it's still higher than the given prices imply.

Compared to some of the prices I've seen posted above from other EU countries, I don't think there's any reason to complain about Sony's UK pricing. If you want to complain to the government about taxes, I think there are better places to start.... VAT (intended for luxury goods) on electricity and heating fuel anyone??!!

You could always start throwing toasters and heaters into a bay in protest.... >_>

 

[Aiddon_v1legacy]

I dunno cuz...'Merica? Seriously, it does baffle me as to why territories outside the US get screwed

 

[Dr.Awkward]

Hey guys, we have this thing in the US called the sales tax. It's state-dependent; it can range between 5 to 12% depending on the state. So, US customers will pay between $420 and 448 for their PS4s.

However, if you want my opinion on this, maybe you guys should start a petition demanding that the EU VAT needs to be either greatly reduced or be replaced by a nation-dependent VAT/sales tax system instead?

EDIT: I see Agayek ninja'd me, but still, if you're so ticked off avout the VAT, don't forget that as part of the EU you can petition for it to be reevaluated and/or replaced.

 

[generals3]

Hey guys, we have this thing in the US called the sales tax. It's state-dependent; it can range between 5 to 12% depending on the state. So, US customers will pay between $420 and 448 for their PS4s.

However, if you want my opinion on this, maybe you guys should start a petition demanding that the EU VAT needs to be either greatly reduced or be replaced by a nation-dependent VAT/sales tax system instead?

There isn't any EU VAT rate actually, they all just hover around 15-27% (the top bracket, many countries also have reduced VAT rates for non-luxury goods) http://ec.europa.eu/taxation_customs/resources/documents/taxation/vat/how_vat_works/rates/vat_rates_en.pdf

 

[Little Gray]

If that's the case though, and Sony are having the consoles made in China, wouldn't that mean the US should be getting hit with an equally high price?

I assumed the consoles were being built in the US, for some reason, but assuming both the UK and the US will be importing the consoles why are the Brits getting hit with a higher price?

I'm guessing it's something to do with us having a higher import tax than the US, meaning Sony would have to reduce their profits to match their US price, and given everything else they're currently doing right I guess I can square that away, but it still sucks we're paying an extra hundred quid.

It has to do with the differences between vat and sales tax. VAT is included in the list price for everything where as sales tax is added on afterwords. Europe does have higher tax rates then pretty much the rest of the world but once you take into account the taxes in both countries the price is fairly similar. Of course even in the US the tax rate varies a fair amount between states.

For example where I live after tax it would come to $450 or 330 pounds which is fairly close to your price. The last difference in price is mostly due to the varied tax rates of different countries so an average and some rounding is used to make it easier.

 

[rob_simple]

If that's the case though, and Sony are having the consoles made in China, wouldn't that mean the US should be getting hit with an equally high price?

I assumed the consoles were being built in the US, for some reason, but assuming both the UK and the US will be importing the consoles why are the Brits getting hit with a higher price?

I'm guessing it's something to do with us having a higher import tax than the US, meaning Sony would have to reduce their profits to match their US price, and given everything else they're currently doing right I guess I can square that away, but it still sucks we're paying an extra hundred quid.

It has to do with the differences between vat and sales tax. VAT is included in the list price for everything where as sales tax is added on afterwords. Europe does have higher tax rates then pretty much the rest of the world but once you take into account the taxes in both countries the price is fairly similar. Of course even in the US the tax rate varies a fair amount between states.

For example where I live after tax it would come to $450 or 330 pounds which is fairly close to your price. The last difference in price is mostly due to the varied tax rates of different countries so an average and some rounding is used to make it easier.

Oh right, so the dollar price they keep throwing around for PS4 isn't what you guys will actually pay, after tax? I remember that confused the shit out of me when I went to America because all the price tags had like $30 dollar but there was all this extra money added on at the checkout.

Okay, I'm not so livid now, thanks for clearing things up a bit.

 

[Something Amyss]

I'm talking about the console prices here just so you all know and mainly about the PS4 because I couldn't care less about the Xbone. $399 or £349 I mean c'mon don't insult us Sony, $399 on a simple XE currency converter is £255.50 which means we are paying £93.50 or $145 more for our console then the guys are in the US. This is a huge difference, I wouldn't mind if it was maybe £20 or £30 more for the console as that could at least be explained with the additional logistics of shipping the consoles to us but nearly £100 more is quite frankly a joke. It's wrong that we are constantly being screwed over with prices when we don't earn any more money than you guys do in the States. It's a real shame cause I was actually looking forward to a couple of the titles that were shown off at their press conference.

I'll trade you your economy and health care for our low prices.

Seriously, direct conversions are not the only factor. Have you looked at what Europe pays for goods compared to the US?

 

[IndieForever]

There is also simply the size of the market to take into account. A hell of a lot more PS4s will be sold in the USA than in the UK or Switzerland, so the margin for Sony can be a few points lower in the larger territory.

You can price pitch to territory - even MS has tried it with cut-price OSs and Office packages for places like south-east Asia where absolutely nobody could afford the Western box price - but the days of Europe being gouged $ for pound or euro are pretty much over for most consumer items. The price differential arises from the higher costs of doing business in Europe.

I would eat my (non-existent) hat if it turned out that the price of offloading a container ship on the West Coast of the States was more expensive than offloading the same goods in Rotterdam, for example....

 

[Little Gray]

Oh right, so the dollar price they keep throwing around for PS4 isn't what you guys will actually pay, after tax? I remember that confused the shit out of me when I went to America because all the price tags had like $30 dollar but there was all this extra money added on at the checkout.

Okay, I'm not so livid now, thanks for clearing things up a bit.

That is correct. VAT which most Europe and a bunch of other countries used is added before the list price where as sales tax is added after. Sales tax is generally used by larger countries like the US and Canada since it allows each state/province to set their own tax rate on goods.

 

[Neyon]

Quick Robin, TO THE CALCULATOR!

VAT in the U.K. is 20%.

20% of £349 is £51, which means the console is sold for £298 + VAT

$399 converted to £ is £255.50, so there's still a £44.50 unaccounted for.

Where does it go?

You have taken 20% of 120% of the price. The actual price before VAT is 349/1.2 = £290.83. This leaves a markup of £35.33 for shipping and pocket-lining but NOT import duty, which is zero in the UK for electronics.

 

[Tom Waits' hat]

To be honest, I was pretty happy when I heard the PS4 is going to be $399. Then I remember I'm in Australia. It's probably going to end up around $500-600 AUD. I guess I'll be getting an used PS4 then.

 

[Something Amyss]

Oh right, so the dollar price they keep throwing around for PS4 isn't what you guys will actually pay, after tax? I remember that confused the shit out of me when I went to America because all the price tags had like $30 dollar but there was all this extra money added on at the checkout.

Okay, I'm not so livid now, thanks for clearing things up a bit.

I'd pay 6% extra in sales tax. Probably a little less than what you're paying. The UK is a 20% VAT, correct? I did all of two seconds of research, so stop me if I'm wrong.

But yes, most places don't include taxes or other fees in their pricing in the US. It's something you get used to, but it's kind of stupid. I prefer the inclusion system.

 

[Headdrivehardscrew]

Get your EU head honchos down in Strasbourg, the Hague, Brussels or whatever to stop messing with imports and business, get them to stop perma-suing Microsoft and other eevul imperialist capitalist forces and sucking millions or even billions out of them for no proper reason.

Get your government to lower your VAT taxes, which don't exactly add any value, just taxes. How much do you have to bleed out your wallet for every transaction now? 10%? 20%? A good comrade 50%? Put those relevant numbers into your number crunching routine and you'll eventually notice that the EU is not about making your life any easier, cheaper or less fun.

Enjoy.

its not the british, its europe in general.

here in germany we also get the stupid $ = ? currency conversion.

My condolences and sympathies. Germany has some of the most ass backwards censorship I've seen outside of Iran or North Korea. And your consumer prices seem to be in inverse proportion to your average income. Also, your taxes seem to be... yeah, well. You got my sympathies. I hope your country will eventually stop having to pay for Hitler. I also hope all of you will eventually stop having to bleed money towards other, less productive fellow nations. You basically bought Greece a new lease on life, and they hate you for it. How many countries can your hard working public finance, and for how long?

 

[rob_simple]

Oh right, so the dollar price they keep throwing around for PS4 isn't what you guys will actually pay, after tax? I remember that confused the shit out of me when I went to America because all the price tags had like $30 dollar but there was all this extra money added on at the checkout.

Okay, I'm not so livid now, thanks for clearing things up a bit.

I'd pay 6% extra in sales tax. Probably a little less than what you're paying. The UK is a 20% VAT, correct? I did all of two seconds of research, so stop me if I'm wrong.

But yes, most places don't include taxes or other fees in their pricing in the US. It's something you get used to, but it's kind of stupid. I prefer the inclusion system.

It's something like that, yeah. It used to be 17.5% but I think they put it up recently, resulting in something of a rabble but, Britain being Britain, we just muttered into our pints and never actually did anything to try and affect a change.

I'm planning to wait a couple of years before springing for a new console, anyway, because I like to give some breathing room for them to work out the kinks and get a decent game library, but it's good to know that, as usual, the internet is over-reacting and we're not actually getting shafted as bad as it originally sounded.

 

[pandorum]

I'm talking about the console prices here just so you all know and mainly about the PS4 because I couldn't care less about the Xbone. $399 or £349 I mean c'mon don't insult us Sony, $399 on a simple XE currency converter is £255.50 which means we are paying £93.50 or $145 more for our console then the guys are in the US. This is a huge difference, I wouldn't mind if it was maybe £20 or £30 more for the console as that could at least be explained with the additional logistics of shipping the consoles to us but nearly £100 more is quite frankly a joke. It's wrong that we are constantly being screwed over with prices when we don't earn any more money than you guys do in the States. It's a real shame cause I was actually looking forward to a couple of the titles that were shown off at their press conference.

With US pricing you still need to add the 9% sales tax to that price. Lets not forget here we pay more if you look at it like that, but tax is included in price. We do pay 20% and that goes to Europe not our elected officials.