Since ebooks became a thing in the United Kingdom, the VAT on each title has been 20%. Whereas hardcover and paperback books were 0% VAT, it made sense to buy print since it was cheaper. Various author organizations petitioned the government to lower or remove the tax on digital books, and the campaign paid off. In early 2020, the VAT on ebooks went to 0%, and everyone patted themselves on the back and proclaimed that the prices of ebooks would finally go down. In 2023, the prices did not go down, and retailers such as Amazon and Kobo did not lower prices and are keeping the difference.
When the VAT went to 0% in 2020, ebook publishers could have cut their prices by 17% and made the same profit. They didn’t. Online retailers could also have reduced the costs to make ebooks more competitive with print, and they did not do that either.
The entire VAT situation in the UK is a perfect example of how author bodies and the publishing industry works. It lobbies for changes in the law, claiming that the public is suffering in some way, and exploits creators’ willingness to help pressure the government to right that wrong. But when those changes are made, the companies do not pass on the benefits to the public or creators but keep most of it for themselves.
Michael Kozlowski has written about audiobooks and e-readers for the past twelve years. Newspapers and websites such as the CBC, CNET, Engadget, Huffington Post and the New York Times have picked up his articles. He Lives in Vancouver, British Columbia, Canada.