The United Kingdom has announced that a change in tax law would push the price of apps, music and other digital downloads – “e-services” higher than before. Currently the price for download is 99p a song, but this is expected to rise in early 2015.
Chancellor, George Osbourne, has announced a new law that will solidify Internet downloads of new apps to be taxed by the standards of the country they were purchased in. Currently, apps are sold through the standards of other European countries such as Luxembourg where the tax rate is as low as 3%.
Now companies like Amazon, Apple and Google Play will have to charge the U.K’s standard 20% tax rate. For consumers this will increase costs for all digital content; books, apps, music etc. This higher price will limit purchases and overall use and increase the likelihood of piracy.
Due to this tax increase, app development will reach higher priority for developers as apps will need to appeal to users in order to reach downloads. As the prices increase, consumers will be more hesitant to purchase apps. It is important they are presented with content that is useful and worth the increased price.
Although this change of tax rate will not be coming into effect for a while, it is still important as it is expected to have a significant impact on the mobile market in the U.K. For further information about this and other mobile news continue to check PreApps.