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Why Cant People In UK Pay The Same As everyone else?

by Frank Ayres
71 replies
It has always annoyed me that if i want to buy a Clickbank product they always want to charge me extra for UK VAT, so i tend to stick to Paypal which doesnt do this.
Today i went to buy XSitePro 2 for $197 and when i clicked buy it put a price in paypal of $226.55, so i went back and chose USA instead of UK and it allowed me to buy for the proper price of $197.
When i clicked return to merchant it said it noted i was in the UK and had to pay the extra otherwise they wouldnt let me have the product.
So now they have $197 (the product price) of my money and i have no product.
I have never known this with a Paypal product before and i think it is very unfair that i have to pay more than someone in USA for the same product.
I have contacted their support and asked for a refund but not heard from them yet.
#pay #people
  • Profile picture of the author John Taylor
    Living and doing business in the UK means that
    we have to comply with the local tax laws.

    If you lived in the US, you'd be expected to pay
    the local state tax.

    John
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    • Profile picture of the author radhika
      One time I bought 4 perfume bottles in UK Heathrow airport. For the money I paid over there can buy 6 bottles in US. It is just the way the local taxes.

      .
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      • Profile picture of the author Paul Ashbrook
        It is also inconvenient to buyers of your product.

        I'm in the UK. My IM business does not turnover enough to pass the VAT threshold yet. So ordinarily I would not charge VAT on any product that I sell.

        However, when I sell one of my Clickbank products to another UK person they have to pay the Tax.

        I'm not a tax expert, but it doesn't seem right to me.
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        • Profile picture of the author Thomas
          Originally Posted by Paul Ashbrook View Post

          However, when I sell one of my Clickbank products to another UK person they have to pay the Tax.

          I'm not a tax expert, but it doesn't seem right to me.
          It's because you're not selling the product to the customer; Clickbank is and they charge the VAT. You are, in fact, selling it to Clickbank.
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        • Profile picture of the author WebScript
          Originally Posted by Paul Ashbrook View Post

          It is also inconvenient to buyers of your product.

          I'm in the UK. My IM business does not turnover enough to pass the VAT threshold yet. So ordinarily I would not charge VAT on any product that I sell.

          However, when I sell one of my Clickbank products to another UK person they have to pay the Tax.

          I'm not a tax expert, but it doesn't seem right to me.
          It is due to the technicalities of how Clickbank is setup.

          So for example, a merchant has a product, lets say an ebook for a retail price of $100.

          When a customer buys the product, Clickbank considers that they (Clickbank) are buying the product from the merchant at a wholesale price of $92.50 (7.5%) less a $1.00 transaction fee, so Clickbank pays $91.50 for the product and sells it to the customer for $100.

          So, for all the Clickbank sales made in the UK (or anywhere for that matter), Clickbank is selling the product to the customer.
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  • Profile picture of the author BizBoost
    All those in favor of socialism, say "Aye!".... (crickets chirping)
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  • Profile picture of the author JayXtreme
    You can't avoid taxes...


    EVER

    Peace

    Jay
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    Bare Murkage.........

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    • Profile picture of the author Paul Davidson
      Originally Posted by JayXtreme View Post

      You can't avoid taxes...


      EVER

      Peace

      Jay
      but we can try!
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      • Profile picture of the author NMP
        Hi

        Ask someone in U.S or any other country buy it for you.
        This way you do nothing illegal just unethical but who cares ;-)
        (doesn't hurt The Business Owner anyway)

        Daniel
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  • Profile picture of the author Frank Ayres
    I have always thought it is a big funny that sometime we have to and sometimes we dont.
    how do i know that XSitePro are going to give the VAT to our Government and if they are in the USA why would they have to collect UK taxes for our Government?
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    • Profile picture of the author Elmer Hurlstone
      I'm fairly certain that XSitePro is a UK based company.

      Your only responsibility and legal requirement is to pay the duly imposed taxes in your region.

      Payment processors do not arbitrarily add taxes to products. The compliance, collection and remittance of collected taxes is a burden on them. While you're concerned with the taxes for your particular jurisdiction they have to be compliant with tax policy across many countries and local taxing authorities within those countries.

      Compliance with the tax laws by the companies you do business with is not your concern--unless you're a revenue enforcement officer.

      Elmer Hurlstone
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    • Profile picture of the author Thomas
      Originally Posted by SpudDS View Post

      I have always thought it is a big funny that sometime we have to and sometimes we dont.
      how do i know that XSitePro are going to give the VAT to our Government and if they are in the USA why would they have to collect UK taxes for our Government?
      Intellimon (who created XSitePro) are a British company.
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      • Profile picture of the author Frank Ayres
        Originally Posted by Thomas View Post

        Intellimon (who created XSitePro) are a British company.
        I guess i just presumed that they were USA and am obviously wrong in my assumptions
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    • Profile picture of the author Thomas
      Originally Posted by SpudDS View Post

      ...if they are in the USA why would they have to collect UK taxes for our Government?
      The reason many US companies charge VAT when Europeans purchase their products is because a large number of European companies (especially webhosts) complained about unfair competition from their US counterparts who, because they weren't obliged to levy VAT, had a 15-25% price advantage.

      An E.U. Directive (in 2004, I think) compells companies selling electronic products into European markets to levy the same VAT rates as local companies. As for compliance... it seems to be hit-and-miss: Some American companies do charge VAT. Some don't.

      Tommy.

      P.S. - I believe it is supposed to apply to all companies based outside the E.U.: I only say U.S. companies because they form the bulk of companies selling to European customers.
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  • Profile picture of the author Frank Ayres
    I think what annoys me is if i buy something in the UK then it is £100 not £100 plus VAT as all consumer prices include the vat so i think if a company is selling something for $197 then this should include the VAT price and not be extra
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    • Profile picture of the author Glenn Leader
      Originally Posted by SpudDS View Post

      I think what annoys me is if i buy something in the UK then it is £100 not £100 plus VAT as all consumer prices include the vat so i think if a company is selling something for $197 then this should include the VAT price and not be extra

      I wouldn't want to lose profits simply because somebody lived in a
      country where taxes make things cost more.

      There is an easy way to avoid paying VAT, but I'm, not gonna help
      you break the law

      Glenn
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    • Profile picture of the author Steadyon
      Originally Posted by SpudDS View Post

      I think what annoys me is if i buy something in the UK then it is £100 not £100 plus VAT as all consumer prices include the vat so i think if a company is selling something for $197 then this should include the VAT price and not be extra
      In the UK, if you runs a company or buy from other businesses, most prices are quoted without the VAT. This gets tagged on.

      It is mainly consumer goods being sold to the public that include the VAT already in the price you see.

      I guess this product is mainly aimed at businesses so they tend to quote net prices.

      Annoying I know.
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  • Profile picture of the author dsmpublishing
    I agree with that, ive always found that the british are more wary before they buy and the tax is a big issue. Even though i live in portugal as ive lived in england during the current tax year im still paying these stupid prices unfortunately but in another country you would be stuck with another kind of tax so we get used to it.
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    • Profile picture of the author JakeDaly
      It's revenge for the Boston Tea Tax. Consider it a small price to pay for your country dominating all major forms of trade and imposing itself onto unwilling countries for the better part of two millenia.

      I mean.. taxes. It's because of taxes.
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      • Profile picture of the author Glenn Leader
        Originally Posted by JakeDaly View Post

        It's revenge for the Boston Tea Tax. Consider it a small price to pay for your country dominating all major forms of trade and imposing itself onto unwilling countries for the better part of two millenia.

        I mean.. taxes. It's because of taxes.
        There's always one... but before you start making
        statements like this, you really should study your
        history.

        Glenn
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      • Profile picture of the author JustVisiting
        Originally Posted by JakeDaly View Post

        It's revenge for the Boston Tea Tax. Consider it a small price to pay for your country dominating all major forms of trade and imposing itself onto unwilling countries for the better part of two millenia.
        And the world is a better place for this entrepreneurial spirit shown by our ancestors.

        Even today there are 53 voluntary members of the British Commonwealth. :p
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  • Profile picture of the author jasonl70
    VAT's included in the price of consumer goods (so it's less 'in your face') for a reason - to keep what's left of it's citizens from revolting like the rest of the 'empire' did

    When I lived in England, I was simply shocked at the VAT.. it was 17.5% tax on everything, not just physical goods.

    Here in the US, sales tax is never included in the price..
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    • Profile picture of the author WebScript
      Originally Posted by jasonl70 View Post

      Here in the US, sales tax is never included in the price..
      Yes, this is basically the case in the US but there are some little (and some not-so-little) differences from state to state ...

      For example some states have no sales tax.

      And, in Illinois and many other states, Gasoline is always priced with the sales tax included.

      Also (in Illinois) a large portion of the time cigarettes are priced with the sales tax included, and the same for drinks purchased in a bar. Drinks in a full service restaurant are almost always priced with the sales tax NOT included. And, magazines and newspapers are exempt from sales tax. Sales tax on food and medicine are taxed at a much reduced rate.
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  • Profile picture of the author Steadyon
    Originally Posted by ProductCreator View Post

    The overall tax burden in the UK is over 50%. Incredible to think that over half of my earnings go to the government.

    Don't feel too bad.

    They know how to spend it wisely and they are looking out for you. Honest.
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    • Profile picture of the author Frank Donovan
      Hi Jake

      Originally Posted by JakeDaly View Post

      It's revenge for the Boston Tea Tax. Consider it a small price to pay for your country dominating all major forms of trade and imposing itself onto unwilling countries for the better part of two millenia.
      Yes. It's all SpudDS's fault.


      Hi Steadyon

      Originally Posted by Steadyon View Post

      Don't feel too bad.

      They know how to spend it wisely and they are looking out for you. Honest.
      I think you missed one of these ---> :rolleyes:



      Frank
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  • Profile picture of the author Steve Peters Benn
    Hi Jason,

    There are several different VAT rates, not just 17.5% - some things are zero rated such as books. Some things such as certain food items are 5%. Its far more horrid than having one fixed rate

    The thing that drives me mad in a lot of the USA is retail prices that dont include sales tax...

    Tax needs to be simplified, for businesses and consumers in my opinion. Perhaps abolish income tax completely?
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  • Profile picture of the author Kim Standerline
    Yup same here

    Really pisses me off. I'm convinced they want me to sort the credit crunch out single handed

    Kim

    Originally Posted by ProductCreator View Post

    The overall tax burden in the UK is over 50%. Incredible to think that over half of my earnings go to the government.
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  • Profile picture of the author Philip John
    Now, I not sure if I was having my leg pulled... about a year ago I was visiting a friend in the UK in the Cotswold's region

    When we went walking about town they pointed out a whole heap of gorgeous old stone buildings that had had the windows in-filled or boarded over - supposedly because there used to be a "window tax" (the more windows your home had the more tax you paid!)

    What's even crazier is that apparently the government was considering reinstating this window tax.

    Very odd.
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    • Profile picture of the author jasonl70
      there use to be a screen tax.. and a radio tax.. there was a tv tax when I lived there during the 90's.


      Originally Posted by Steadyon View Post

      Don't feel too bad.

      They know how to spend it wisely and they are looking out for you. Honest.
      yeah... riigghtt... I remember collecting donations for a young girl with luekemia, so her family could send her to the states for treatment.

      The great social medicine system decided that since she was most likely going to die anyways, they'd kick her out of the hospital and offer her no treatment. Afterall, it was the fiscaly responsible thing to do with the tax payers money - save the medicine and bed space for people who had a better chance at living..

      don't get me started

      I loved UK, and the people were wonderful, but it is FAR from perfect. Of course, so is every other country.
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    • Profile picture of the author Frank Donovan
      Originally Posted by Phil Hosemans View Post

      Now, I not sure if I was having my leg pulled... about a year ago I was visiting a friend in the UK in the Cotswold's region

      When we went walking about town they pointed out a whole heap of gorgeous old stone buildings that had had the windows in-filled or boarded over - supposedly because there used to be a "window tax" (the more windows your home had the more tax you paid!)
      That's nearly right. In fact, it was a "Windows" tax, levied on every home with a PC. Homeowners had to board over their windows to stop the Sheriff's men from peering in.

      Of course, in those days, the operating system was written in latin...



      Frank
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  • Profile picture of the author steve m
    I live in th UK but where I live Guernsy we do not pay VAT. But if I buy stuff online I can claim back the VAT I paid if I get recipts but I have not done it yet maybe when I have to pay a big ammount I might.
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  • Profile picture of the author X
    Exactly.

    I'm sick of customers buying something and
    asking for a refund because they're charged
    VAT. If you live in the UK, you're going to
    pay tax for that privilege. It's not the
    merchant charging you - if you don't want
    to pay tax, don't buy things. It's simple.

    X
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    • Profile picture of the author Frank Ayres
      Originally Posted by X View Post

      Exactly.

      I'm sick of customers buying something and
      asking for a refund because they're charged
      VAT. If you live in the UK, you're going to
      pay tax for that privilege. It's not the
      merchant charging you - if you don't want
      to pay tax, don't buy things. It's simple.

      X
      it isn't that simple, i agree that if it had stated on the web site that price was $197 + VAT then fine, but until you get into Paypal the only price quoted is $197 and i only had $200 in my paypal account.
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  • Profile picture of the author Diana Lane
    The window tax was not a wind-up, but it's not something that's been in force for many years. There was an old house opposite our school that had some of it's windows filled in because of it, and even then (in the late seventies) it was seen as something that was a feature of 'the olden days'.

    If there were any plans to reinstate it, I never heard of them. Our government doesn't need to revive barmy old ideas anyway - it has no trouble coming up with barmy new ideas of it's own.
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    • Profile picture of the author Kim Standerline
      I believe the windows tax was introduced in the 16th/17th century (whenever) as an excuse to garner money to fight some war or something (I could be wrong lol)

      Kim

      Originally Posted by Diana Lane View Post

      The window tax was not a wind-up, but it's not something that's been in force for many years. There was an old house opposite our school that had some of it's windows filled in because of it, and even then (in the late seventies) it was seen as something that was a feature of 'the olden days'.

      If there were any plans to reinstate it, I never heard of them. Our government doesn't need to revive barmy old ideas anyway - it has no trouble coming up with barmy new ideas of it's own.
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      • Profile picture of the author NMP
        The VAT (Value Added Tax) is a factor that lose a lot of sales online.
        You see we in Europe get this nasty 15-25% addded on orginal price.

        Sweden/Norway has 25% VAT(Moms) on non food products. So it's
        just not UK. Read more here:

        Value added tax - Wikipedia, the free encyclopedia
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        • Profile picture of the author JustVisiting
          Originally Posted by NMP View Post

          The VAT (Value Added Tax) is a factor that lose a lot of sales online.
          You see we in Europe get this nasty 15-25% addded on orginal price.
          What really pisses me off is living this side of the pond I have to pay VAT on Google Adwords. Every $1 click actually costs me $1.15
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          • Profile picture of the author NMP
            Yeh like if life wasn't expensive enough. We pay 30% on average on
            salary. Then 25% on non food. 12% on food. And tax on everything
            almost. Sure we have good healtcare that is almost free and a lot
            of other stuff.

            But best way is to register a Business and get a VAT ID. This way
            you still pay taxes but can deduct from your expenses every year.
            At least here...

            Daniel


            Let say I work and make $1000 > Tax Man wants 300 (700)
            Let say I go buy a new PC for my 700 that is left > Tax Man Wants 175 (525)

            ...and we can go further until we are taxed to death. But in just 2 steps
            from earning 1000 I am almost 50% down. No wonder we try live tax free LOL
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  • Profile picture of the author Steadyon
    New government satellite launches have now introduced the technology and the programming, for the government to photograph what property additions you have added and match this with what is on the various government databases.

    Then they send you a bill for unpaid taxes.

    This is all waiting in the wings.

    If a government keeps pissing money away, they have to find new ways to quench their thirsts.

    Fresh air tax next?
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  • Profile picture of the author artwebster
    All I can say is that if the company levying the tax is OUTSIDE the country for which the tax is levied (like Clickbank is outside Europe) the degree of trust in proper disbursement of the collected tax is huge.
    If Clickbank sells $500,000 of products per week into Europe they will collect VAT of something in the region of $5.600,000. We all know that the European Union is run by numbnuts so it is a safe bet that:-
    1 - European tax offices have no way of checking the tax due and
    2 - European tax offices would be delighted to see $600,000 paid in to the coffers.

    Not that Clickbank would think of with-holding . . . . . .
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  • Profile picture of the author Steadyon
    It's weird to think that most people didn't pay taxes 100 years ago.
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    • Profile picture of the author pjCheviot
      Banned
      Originally Posted by Steadyon View Post

      It's weird to think that most people didn't pay taxes 100 years ago.
      Taxation in one form or another has been around for 5,000 years - I can vaguely remember!

      Tax World: A History of Taxation
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      • Profile picture of the author Steadyon
        Originally Posted by pjCheviot View Post

        Taxation in one form or another has been around for 5,000 years - I can vaguely remember!

        Tax World: A History of Taxation

        Yes, but if you read the article you will see that the "taxes" were often less than 1% or 3% up to a whopping 8%, if you were the equivalent of a modern day billionaire. Most people didn't pay any.

        I don't call those small percentages taxes when you compare it to today.

        The average middle class hard working person today pays over 50%, when all the different types of taxes are added up.

        So don't fall into the trap of thinking that "taxes" as we know them today have always been around. They haven't.
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        • Profile picture of the author pjCheviot
          Banned
          Originally Posted by Steadyon View Post

          Yes, but if you read the article you will see that the "taxes" were often less than 1% or 3% up to a whopping 8%, if you were the equivalent of a modern day billionaire. Most people didn't pay any.

          I don't call those small percentages taxes when you compare it to today.

          The average middle class hard working person today pays over 50%, when all the different types of taxes are added up.

          So don't fall into the trap of thinking that "taxes" as we know them today have always been around. They haven't.
          Tax is tax is tax - no matter what percentage.

          Just my thoughts . . . . thanks for yours . . . .
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          • Profile picture of the author Steadyon
            Originally Posted by pjCheviot View Post

            Tax is tax is tax - no matter what percentage.

            Just my thoughts . . . . thanks for yours . . . .

            If you say so.
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  • Profile picture of the author onlinemoney00
    I dunno, usually our currency is one of the strongest, if not the strongest in the world, Lol
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  • Profile picture of the author udskiii
    Laws Laws Laws....
    I'm not suggesting you use this ...but a US proxy would do the trick.....
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    • Profile picture of the author Frank Ayres
      Originally Posted by udskiii View Post

      Laws Laws Laws....
      I'm not suggesting you use this ...but a US proxy would do the trick.....
      Not when you have a UK registered Paypal address, that is how XsitePro new i was from UK, via my paypal address
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  • Profile picture of the author Scott Ames
    Originally Posted by ProductCreator View Post

    The overall tax burden in the UK is over 50%. Incredible to think that over half of my earnings go to the government.
    At least they keep a tight rein on spending and squeeze value out of every dollar collected. Ok... I'm going to hurl.
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  • Profile picture of the author Gren Bingham
    I guess if you don't like VAT, get into politics and help make a change. It is possible to avoid it with some online payment systems, but they are getting cannier. However, don't feel that the US has a free ride ... some US buyers in certain states have to pay a state sales tax, which is similar.
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    • Profile picture of the author Wakunahum
      Is the product worth the extra 17.5%?

      If yes, buy.

      If no, then don't buy.

      This seems more of an issue with perception cause you expect the vat to be in the price than a real issue of sorts.
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  • Profile picture of the author Floyd Fisher
    Originally Posted by SpudDS View Post

    It has always annoyed me that if i want to buy a Clickbank product they always want to charge me extra for UK VAT, so i tend to stick to Paypal which doesnt do this.
    Today i went to buy XSitePro 2 for $197 and when i clicked buy it put a price in paypal of $226.55, so i went back and chose USA instead of UK and it allowed me to buy for the proper price of $197.
    When i clicked return to merchant it said it noted i was in the UK and had to pay the extra otherwise they wouldnt let me have the product.
    So now they have $197 (the product price) of my money and i have no product.
    I have never known this with a Paypal product before and i think it is very unfair that i have to pay more than someone in USA for the same product.
    I have contacted their support and asked for a refund but not heard from them yet.
    It's called the law. EU requires you pay VAT on everything, no matter where you purchase it.

    If you don't like it, get the law changed.
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  • Profile picture of the author James12C
    Death, and taxes.......
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  • Profile picture of the author spearce000
    Blame Gordon Brown! He extended VAT to online purchases when he was chancellor -- although he may just have been passing on an EU edict for all I know (in which case blame Ted Heath).

    Very prudent!
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    • Profile picture of the author Thomas
      Originally Posted by spearce000 View Post

      ...although he may just have been passing on an EU edict for all I know (in which case blame Ted Heath).
      See post #13.
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  • Profile picture of the author Sam Rodrigo
    Hi Spud.

    Paypal is not a bank. It transfers money. You transferred money to Paypal, which then is setting in "Paypal" to be disbursed to who you want. In this case, xSitePro. I suspect that is a gray area that is missed by tax authorities. But, since they spend all that time surfing forums and such, I am sure they are noting down that they need to collect taxes via Paypal too.

    Thanks Man... Now your fellow buddies will be taxed soon in the UK. No escape! On the other hand, in the USA we don't need to "fund" royalty, as such our taxes are lower.

    Success,
    Sam
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    • Profile picture of the author Paul Duxbury
      For those interested in the "Window Tax" mentioned earlier, which was more correctly a tax on glass, Wikipedia has an interesting article: Window tax - Wikipedia, the free encyclopedia

      The thing that does annoy me about the addition of VAT is when it is added to the price of eBooks. Books themselves are zero rated but because eBooks have to be downloaded they are taxed as if they are a piece of software.

      Paul
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    • Profile picture of the author tomfra
      Originally Posted by Sam Rodrigo View Post

      Paypal is not a bank.
      OK, this may sound strange, but the EU branch of PayPal *IS* technically a bank! They have a Luxembourg banking license - PayPal receives banking licence - Wikinews, the free news source .

      The EU VAT has complicated matters for many EU based merchants, I know of no membership software that supports EU VAT directly, had to modify my version of aMember myself.

      This problem has nothing to do with the UK, it's been decided on the EU level and all EU member countries have to comply.

      The only way to avoid it when doing businee online is to use a payment processor that acts as a reseller but has no EU branch. Such an example is 2CheckOut. If you use 2CO for the payment processing, a US company purchases the product/service from you (the merchant) and resells it to the end customer.

      So the merchant sells to a non-EU company and the non-EU company resells it. No EU VAT is charged in such a case. But if you deal with a company that acts as a reseller but has a EU branch (e.g. Clickbank), the EU VAT has to be charged.

      The EU VAT should not be added to the price if you are VAT registered (I am), but I believe that Clickbank does not even give you a chance to enter the VAT ID anywhere.

      Tomas
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  • Profile picture of the author ahlexis
    I know VAT sux!

    But here's the thing:

    The SELLER OF THE PRODUCT did not inform you, so you did not EXPECT TO PAY the VAT. This issue is not a matter of VAT vs. No VAT, it's SELLER DID NOT PROPERLY MANAGE YOUR EXPECTATIONS!

    So technically on the sales page you were LIED TO. Yes, I know that's an extreme. But any seller that takes issue with someone who tries to buy and then does not complete the purchase due to VAT issues did not properly manage customer expectations.

    I hate taxes as much as the next guy (Actually that's not true, I hate them MORE! A long story I'll share someday!), but taxes are not always the issue.

    [And here's the thing:

    What happens if someone sets up a USA Paypal account using a Visa or MasterCard logo'd gift card from Simon.com (they have virtual accounts and physical card accounts, pick one!) and uses Realtor.com to get an address? Not suggesting it, but then again, what if? It IS after all a digital product, so how do they know? Like someone said earlier, proxies anyone? (IANAL, etc. You're on your own if you try this! But they work when creating Paypal accounts, and they work when making purchases through Paypal without a Paypal account. Once you have card number, you login 2 simon.com and register your address wherever you choose.) I have yet to try buying one with a Paypal debit card, but why would it NOT work? Cost of Simon gift card is less than cost of VAT.]
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    • Profile picture of the author Thomas
      Originally Posted by ahlexis View Post

      What happens if someone sets up a USA Paypal account using a Visa or MasterCard logo'd gift card from Simon.com (they have virtual accounts and physical card accounts, pick one!) and uses Realtor.com to get an address?
      Hardly seems worth the bother...
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  • Profile picture of the author BigG95
    Maybe it would work if you just stated you are in the US, that is what I do, when they try top charge me Euro, as I do have a USD account and don't like the exchange rates
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