Category Archives: book

VAT on eBooks, and yet more reasons to dislike Amazon

We all know that Amazon doesn’t pay tax. It’s a matter of public record and the subject of many a vainly attempted Christmas boycott. One of the many wheezes they use is to sell all of their digital books from a Luxembourg subsidiary. They do this because Luxembourg only charges 3% VAT on digital goods, whereas the UK government levies 20% VAT on ebooks.

This means that the largest retailer of digital books in the UK pays only 3% VAT on its ebook sales, but any UK based retailer is forced to pay 20% VAT. This dramatically skews the market in Amazon’s favour, and is hugely detrimental to any attempt by another retailer to break Amazon’s grip on digital reading.

Right now, for example, a book sold at £4.99 by Amazon nets Amazon £4.84 after tax, but only nets a UK based retailer £4.16. In a retail sector with such aggressive competition that 68p is vital and at the moment UK.gov is heavily favouring Amazon’s position.

Amazon are also playing fast and loose with the VAT rules in other ways. Right now a self published author through KDP only pays the 3% rate that Amazon pays. This means that the author lists their book at £1.93 and it appears for sale at £1.99 on the Amazon site. However, Amazon is charging traditional publishers the full 20% rate, despite only paying 3% themselves. In other words, they are screwing additional margin out of the traditional publishers while further tipping the balance in favour of the self published authors (and, one assumes, those published by Amazon themselves).

Currently there is a ruckus about VAT on ebooks in the UK, with a legal challenge to the validity of the tax underway. Physical books are VAT exempt in the UK, and there are two strong legal arguments that ebooks should be too. Firstly the book VAT exemption simply uses the word “book”; a digital book is still a book and any attempt to levy VAT on an ebook could be ruled a misinterpretation. Secondly, previous case law has ruled that where an item meets a consumers needs “in the same way” it should be classified similarly for VAT purposes; clearly an ebook satisifies this criteria too.

I’m hoping HMRC rules that digital books are VAT exempt:

  • Physical books are already VAT exempt for a good reason; as we move to digital by default we don’t want a stealth tax on reading
  • The UK government doesn’t get any revenue from ebook VAT anyway, as Amazon pays its VAT in Luxembourg
  • It’s hugely skewing the UK market in Amazon’s favour, making competition even harder
  • If the EU does force France and Luxembourg to increase their VAT rates on digital goods while we are VAT exempt it will create an advantage for UK online book retail throughout Europe

Back in 2001 Gordon Brown scrapped Betting Duty (where the punter paid 9% on either their stake or their winnings) because offshore gambling sites that paid no Betting Duty were skewing the market and killing UK bookmakers. Now is the time for a similarly enlightened view on ebook VAT.

[1] Amazon force publishers to pay full VAT

[2] VAT may be dropped on eBooks

[3] Gordon Brown scraps Betting Duty

This never happens to me!

The Kindle edition of the rather excellent book Red Plenty is broken.  It has lots of footnotes in it that are completely unlinked from the body of the text.  This, combined with the Kindle’s inability to show footnotes in any other way than inline, means that at the end of every chapter you find yourself either undertaking a very fiddly process of trying to skip back and forth to reread the text, now with footnotes, or simply angrily flicking past them (which in the case of this book is 24 pages for the first chapter; or “click, pause” 24 times).

I’d been really looking forward to reading this, so I was genuinely pissed off.  I ranted a bit on Twitter (as you do) but then actually got angry enough to go and write a review on Amazon.  I’ve never done this before, but felt cross enough about the combination of a) poor execution of something so simple by the publisher, b) the fact that the Kindle edition was £1 more than the paperback, and c) that Amazon has no Kindle returns policy (even if it’s fundamentally broken), that I actually went and did it.  Spleen vented, I moved on (after checking that it had been published, of course).

This morning, through the contact form of our company website, the author got in touch with me.  He asked me about the problems with the book (not having a Kindle himself) and offered me an author’s copy of the book to make up for my poor experience.

Isn’t that awesome? (and doesn’t it show how hard it is for publishers to add value in a world of pure digital distribution?)

And of course I can’t let this pass without linking to this conversation on Twitter 😉

Plone for Content Managers

Plone for Content Managers claims to be the first book written for the people that actually end up using Plone, rather than developers. This is a book that I’ve been waiting for so long that I’ve attempted to write myself more than a few times. Unfortunately it’s only available from Amazon US at the moment, so it’ll be a while before I can tell you if it’s actually any good. Check the Isotoma blog in about 36 days 🙂

Are you Dave Gorman? by Dave Gorman

Just finished this – got bought it for my birthday. Dunno if you saw the TV series that resulted from
this book, but the basic premise is that Dave Gorman (comedian) and his mate Danny Wallace (journalist) try
and prove a bet that there are ‘loads’ of other Dave Gormans (Gormen?) in the world.

While the story
itself is funny what actually comes across and makes this book funnier than the TV is the relationship
between Danny and Dave, and exactly what their quest/obsession does to their relationship and their
relationships with their friends/loved ones.

First book in a while that’s actually made me laugh
out loud – highly recommended!