Pricing Rip-Off in the UK

[Chris Lambrechts]

I'm moving this to the general discussion forum.
Nothing wrong with having pricing discussions but I think this goes beyond PT 11 alone.

I'm not an expert but I do know that VAT is often misunderstood. For example : it is not because you have a VAT registration that you do not have to pay VAT. You still do. People tend to look at it as 'oh if you're a company you dan;t pay VAT' which is completely wrong.

As a company you account incoming VAT generated by outgoing invoices agains outgoing VAT - generated by incoming invoices. In other words - VAT on investments against VAT on income.

You do not own VAT - ever - The state or country you live in owns VAT.

Chris

[8dB.co.uk]

Originally Posted by Chris Lambrechts

I'm moving this to the general discussion forum.
Nothing wrong with having pricing discussions but I think this goes beyond PT 11 alone.

I'm not an expert but I do know that VAT is often misunderstood. For example : it is not because you have a VAT registration that you do not have to pay VAT. You still do. People tend to look at it as 'oh if you're a company you dan;t pay VAT' which is completely wrong.

As a company you account incoming VAT generated by outgoing invoices agains outgoing VAT - generated by incoming invoices. In other words - VAT on investments against VAT on income.

You do not own VAT - ever - The state or country you live in owns VAT.

Chris

Thanks Chris.

Of course, you pay the VAT initially, but you get to claim it back, if you are VAT registered, but then you're also charging VAT on your services, which as you rightly say, you never own. The VAT threshold in the UK is around £70k. I'd love to be breaking that, but at the moment that's a distant dream.

What I am specifically interested in now, is what effective NET price a US resident with a US $ account would pay. The local prices in the EU & UK show the price including tax, but are you saying that the US site doesn't?

[Chris Lambrechts]

Originally Posted by 8dB.co.uk

Thanks Chris.

Of course, you pay the VAT initially, but you get to claim it back, if you are VAT registered, but then you're also charging VAT on your services, which as you rightly say, you never own. The VAT threshold in the UK is around £70k. I'd love to be breaking that, but at the moment that's a distant dream.

What I am specifically interested in now, is what effective NET price a US resident with a US $ account would pay. The local prices in the EU & UK show the price including tax, but are you saying that the US site doesn't?

see it is the 'claiming back' part where I disagree. Yes I see what you mean and yes in many ways everybody thinks about it that way but it really is more complex than that.

For example : do you really think any company that is VAT registered in any country here in Europe would be allowed to just claim VAT back ? I doubt it. It is a balancing thing. incoming VAT and outgoing VAT are being balanced out against each other. Remember - when you collect VAT - you are actually collecting it for your local authority. That money is not yours. It never is.

Now if you're outgoing VAT is larger then your incoming VAT - that basically means that you are in a situation where you can 'reclaim' VAT. Which btw will open up a complex process on it's own which is very time consuming and literally takes months and by the time you file your next VAT report you are likely to just balance it out again. Just another point to prove that 'getting VAT back' is not what people think it is.

VAT is a tax. Governments collect tax. All you do as a VAT registered person is collect it for them and when time comes to pay them out - you go like ' hold on - but in the meantime I have also paid all this VAT and then they go - fine - you can balance all that out.

Chris

oh as for the US shop ? not 100% sure to be honest but if you compare to other US online shops it would be Ex VAT or sales tax. Once you log out and fill out the state you live in - local VAt or sales tax will be applied to the checkout amount. ...... I think

Chris

[8dB.co.uk]

Originally Posted by Chris Lambrechts

see it is the 'claiming back' part where I disagree. Yes I see what you mean and yes in many ways everybody thinks about it that way but it really is more complex than that.

For example : do you really think any company that is VAT registered in any country here in Europe would be allowed to just claim VAT back ? I doubt it. It is a balancing thing. incoming VAT and outgoing VAT are being balanced out against each other. Remember - when you collect VAT - you are actually collecting it for your local authority. That money is not yours. It never is.

Now if you're outgoing VAT is larger then your incoming VAT - that basically means that you are in a situation where you can 'reclaim' VAT. Which btw will open up a complex process on it's own which is very time consuming and literally takes months and by the time you file your next VAT report you are likely to just balance it out again. Just another point to prove that 'getting VAT back' is not what people think it is.

VAT is a tax. Governments collect tax. All you do as a VAT registered person is collect it for them and when time comes to pay them out - you go like ' hold on - but in the meantime I have also paid all this VAT and then they go - fine - you can balance all that out.

Chris

oh as for the US shop ? not 100% sure to be honest but if you compare to other US online shops it would be Ex VAT or sales tax. Once you log out and fill out the state you live in - local VAt or sales tax will be applied to the checkout amount. ...... I think

Chris

Thanks Chris.

With Avid taking away little things like HFS disk support (in Windows) and also charging CPTK users the same as HD to simply retain features like surround mixing and disk caching, which then elevates us to the HD price structure for all future upgrades, every penny counts!

In the UK certainly, the gap between top-end facilities - the Atmos rooms with multi ProTools mix rigs, and the small facilities / freelancers trying hard to service a market where rates are lower than in the late 80's, is widening. There has been a long discussion about this in other areas of the forum so I'm not going to open that can of worms here as well. Suffice to say this is why a lot of people are having to make very careful decisions about what they invest in.

[The Byre]

If you factor in the cost of converting the currency and the import duty, plus, of course the VAT, Avid is charging slightly LESS in the UK.

As for VAT registration, in the UK, ANYBODY engaged in a commercial venture can register. You only HAVE to register if your turnover goes above a certain level.

In Germany, ALL TRADERS have to register. If you are providing a commercial service, you must be MwSt registered.

[8dB.co.uk]

Originally Posted by The Byre

If you factor in the cost of converting the currency and the import duty, plus, of course the VAT, Avid is charging slightly LESS in the UK.

As for VAT registration, in the UK, ANYBODY engaged in a commercial venture can register. You only HAVE to register if your turnover goes above a certain level.

In Germany, ALL TRADERS have to register. If you are providing a commercial service, you must be MwSt registered.

Thanks. The regional variations are mind boggling. However, doesn't the software officially "come from" the EU anyway? The auth cards are from Holland or certainly were.

Sent from my XT910 using Tapatalk 2

[Mista Min]

Originally Posted by 8dB.co.uk

The VAT threshold here in the UK is quite high, for someone who is a single person company. You can voluntarily register but it does then also cost in paperwork.

Would anyone be able to illuminate me as to the effective NET cost in dollars that a US resident with a US $ account would pay?

Sales tax in the US varies from State to State since there is no federal sales tax, so currently there is no sales tax charged for online out of state purchases. So that means most people pay the advertised price, except those who live in the state where the retailer resides.

From Wikipedia... "Tax rates vary widely by jurisdiction and range from less than 1% to over 10%.... Unlike the value added tax, a sales tax is imposed only once, at the retail level." - http://en.wikipedia.org/wiki/Sales_t..._United_States

[The Byre]

Originally Posted by 8dB.co.uk

The VAT threshold here in the UK is quite high, for someone who is a single person company. You can voluntarily register but it does then also cost in paperwork.

Once a quarter, someone here sits down and fills in ONE PIECE OF PAPER with a handful of basic figures, such as net turnover, VAT paid and at what rates it was paid, etc. and sends that off with either a cheque or in expectation of receiving a cheque, depending on whether we made a gross loss or profit. Given that these are figures that one is obliged by law to keep anyway, that is hardly a major effort in bureaucracy!

But think about the consequences of not being registered. Here are a couple of scenarios -

1. You are I build a studio. It costs with equipment £500,000. OK, that's a cheap studio, but this is for example's sake only. You pay £600,000, I pay £500,000. That's quite an advantage I will then have over you! That's enough to keep the doors open for a few years, whilst I wait for goodwill to build.

2. You and I start out in business as editors and we each go out and buy a PT rig for £10k. Well, you get to pay £12k, I can spend the extra £2k on direct contact marketing to music agencies that hire editors.

[Frank Kruse]

Originally Posted by 8dB.co.uk

Thanks. The regional variations are mind boggling. However, doesn't the software officially "come from" the EU anyway? The auth cards are from Holland or certainly were.

Sent from my XT910 using Tapatalk 2

It's not mind boggling at all. The initial claim was that Euro customers are "ripped off". Fact is (as far as the German price goes) that the German retail price is more or less the dollar-price converted to euro plus 19% VAT on top.

So no real rip off there.

On the VAT topic.
Also a fact is that if you're a business and charge VAT you can claim everything spent on running you business back. That's the whole point of the VAT.

Also for purchases within the EU you can get a VAT ID (for free) and any business you do with another EU company can be done without even charging the VAT because it's been charged and then re-claimed anyway. This is done to make business easier and to decrease paperwork that is only a plus/minus zero outcome.

If you run a business and don't claim the VAT you spent your are simply burning money in your chimney.

I haven't done the numbers on the sterling price but as far as the German Euro price goes it's pretty much the US price we're paying +- a few euros due to exchange rate.

Essentially VAT is payed by the private enduser but not businesses (incl. invoicing freelancers etc.).

This is how it works here.

SOme months I have to hand over the VAT I charges because the VAT on my spends where less than why I charged on my invoices. In other months where I didn't invoice anyone but spent money for my business (plugins, hardware, anything I need to run my business) I even get all the VAT I spent back.

If you run an audio business and you don't claim the VAT you spent you are doing something seriously wrong and probably burning thousands (if not ten thousands of pounds) every year that you could have claimed back.

Which is why I recommended to read about what VAT and how it works in your country in in my initial response.

VAT might be higher in the UK than in Germany but essentially for businesses it doesn't matter. It could be 50% and still not effect my business cost.

VAT effects you when you buy groceries for your home but not when you buy equipment for your studio.

[abes]

[QUOTE=Frank Kruse;2051851]so 3% being "ripped off"?

and you even get the VAT back. So why the outcry?

Because everyone who uses Pro Tools in the UK earns over the £70,000 VAT threshold! Bit of a silly statement to make really