Why do we have to pay more than US for top gadgets?
A cutting edge gadget to be released this Friday and change the face of mobile computing will be charging UK customers a hefty premium.
The news for iPad fans is pretty depressing. The second generation of the pioneering tablet computer, which is thinner, lighter and faster than its predecessor, will cost around £100 more to purchase in the UK than the US.
The iPad 2 goes on sale in UK shops at 5pm tomorrow and online 14 hours earlier at 1am.
The starting price, including VAT, for the basic 16GB model is £399. That is £64.75, or around 20 per cent, more than the price a New York shopper would pay, again including the city’s sales tax.
The highest-spec model is £659 here including VAT, compared with £554.18 in New York. This means a British consumer will pay £104.82 more than their American counterpart.
In part the difference can be explained by Britain’s VAT which is more than double New York’s VAT of just 8.875 per cent.
However this still doesn’t account for the total difference in price. Many technology giants see Britain as an extra moneymaker, where prices can be hiked up.
Britain doesn’t only see excessive mark-up on technological products. Fashion brands; Zara, Gap and Ralph Lauren to name a few, have been known to do similar things. Not to mention a history of British customers paying far more than European consumers.
Manufacturers argue that doing business in Britain is more expensive and therefore this has to be reflected in product prices, insisting the cost of rent, rates and staff is much higher here.