Music downloads from the likes of Apple and Amazon may be getting more expensive in the UK in the not-too-distant future. That, or the companies will have to suck up higher taxes, due to the British government closing a tax loophole on sales of digital content. The Guardian reports that current rules allow stores to sell downloads through countries like Luxembourg, and pay as little as 3% in tax rather than the 20% rate of VAT in the UK. From 1 January next year, British chancellor George Osborne plans to enforce the latter. “From 1 January 2015 these services will be taxed in the member state in which the consumer is located, ensuring these are taxed fairly and helping to protect revenue,” explained last week’s budget document. The report refers to research firm Greenwich Consulting’s claim that the UK is losing more than £1.6bn a year in VAT on digital purchases. Note: what’s being cracked down on are “intra-EU business to consumer supplies of telecommunications, broadcasting and e-services”, so this could well affect streaming music services too.
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