UK ebook prices could rise next year after the Government announced changes to the way digital downloads are taxed.
Currently retailers are allowed to charge VAT at he rate set by the country their store is based in, a rule which has seen Apple and Amazon set-up home in Luxembourg which levies just 3% on ebooks.
In his budget last week, Chancellor George Osborne confirmed the UK would change the rules to require that purchases are taxed at the rate in the buyer’s home nation.
This would see VAT on ebooks rise to 20% and could be worth up to £300m of additional revenue for the UK Government every year from the sale of digital magazines, books and films.
The new rules will come into effect from January 2015.