UK Budget Plan Could Increase Digital Game Prices

Gamers in the UK could experience an increase in digital game prices in the future.

Thanks to a new budget plan being implemented Chancellor George Osborn, consumers could see the closure of an existing tax loophole that, up until now, has allowed for the cheaper sale of digital music, games, books and apps. The closure of the loophole will make it so the aforementioned digital products would now fall under the UK’s VAT which could raise prices by as much as 20 percent depending on how much of the cost is passed onto consumers. The changes will come into place on January 15th, 2015.

According to the text of the budget document, the loophole is being closed so that “services will be taxed in the member state in which the consumer is located.” This will bring a stop to company’s and services like Apple and Steam selling their products through countries with lower tax rates than the UK.

While the aim of this alteration is “to protect revenue,” it could have the affect of bumping digital game prices. For instance, a Steam game costing £34.99 could, in the future, cost around £37. This, of course, wouldn’t be the best of news for gamers.

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1 Comment on UK Budget Plan Could Increase Digital Game Prices

Blake Anderson

On March 27, 2014 at 1:52 am

Speaking as someone from the UK, one of the biggest criticisms the government has faced has been due to its failure (or deliberate refusal depending on what side of the fence you fall) to curtail tax evasion and avoidance. Not to punish companies for making money, simply to make sure that they contribute a fair share instead of hiding behind pages upon pages of loopholes and threatening to take their ball and go elsewhere if they’re expected to abide by the laws of the land. So, in theory, I should support this ruling even though the burden will almost inevitably go to an already massively squeezed taxpayer. The problem, of course, is that the games industry’s tax avoidance is a pittance compared to that of massive companies like Starbucks, Vodafone, Amazon and many others who are getting away with everything bar murder, paying little to no tax and in fact massively damaging the economy by bringing in cheap labour from other EU countries resulting in overpopulation and huge unemployment rates in many cities, all while not letting any of the profits trickle back down into society AND while raising their prices considerably and usually well above inflation. And the less said about the banks’ role in this, the better. Until these things are tackled – which they won’t be by any currently-existing mainstream party left or right who have spent far too long with their noses in the trough to pull out now – I will not accept that this is a necessary policy.

Also, George Osbourne is already despised or at best ridiculed over here, and this just serves as further fuel. Why? Take a look at the first ‘Related Content’ link. It was published only 16 months ago. He doesn’t know whether he’s coming or going. I wish it was the latter.