UK tax law change could raise price of digital downloads

Taxman opens Pandora's box

The UK is planning a change to VAT rules which could see downloads being charged for the first time.

At the moment digital storeowners "are allowed to sell digital downloads through countries such as Luxembourg, where the tax rate is as low as three per cent."

However as pressure mounts for countries to start collecting reasonable taxes from big companies like Apple and Google, it seems that the British are going to force e-tailers to pay up.

End of a pound a song days

It will mean that charging a pound for a song is over, and that the cost to consumers for books, apps, and other digital content will rise at once.

The Guardian claims that the government could raise £300 million with the tax change which would meant that it could have paid for the Olympics if it had been charging VAT for downloads.

The move will have some support from beleagued High Street retailers who feel that the online sellers are being given all the advantages and tax breaks, according to the Guardian's report. Others have claimed that the increased prices could depress the industry.

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