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The price of apps, books and music downloaded from Apple’s App Store and other online stores could be set to soar in the UK.

New rules, buried in last week’s annual budget, mean the likes of Amazon and Apple will have to pay higher UK VAT rates on software sales.

Until now, tech companies were able to swerve the 20% tax, selling their add–ons, songs, books and movies via countries with lower rates, such as Luxembourg.

The ruling is set to come into force on January 1st 2015, and will likely mean that the age of the 99p download is coming to an end.

App prices and the cost of movies is also likely to rise in line with the new regulations.

The Budget states: "The government will legislate to change the rules for the taxation of intra-EU business to consumer supplies of telecommunications, broadcasting and e-services.

“From January 1ST 2015 these services will be taxed in the member state in which the consumer is located, ensuring these are taxed fairly and helping to protect revenue."


The Guardian

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