Steve Jobs defends UK iPad pricing

If you were dismayed by Apple's very believable prices in the UK for the upcoming iPad, blame the Labour, err, Conservative, errrrrr, Liberal Democrat government and VAT.

Two distinctly displeased punters here in the UK took time out from watching Britain’s Got Talent to vent their frustrations via email to head Apple honcho, Steve Jobs.

“Please educate yourself. UK prices must by law include VAT (Value Added Tax), which is around 18%. US prices do not include tax,” he replied.

As Steve almost correctly points out, VAT in Britain is uniformly charged at 17.5 percent on consumer goods and is always included in the sticker price.

Our American cousins’ advertised prices, however, do not include sales tax, since its rate differs wildly from state to state (0 - 11 percent). Before you ask, Delaware, New Hampshire and Oregon citizens are the lucky blighters.

The local sales tax rates are then added at the cash register, probably prompting the kind of collective groans not heard since Debbie headed off to Dallas armed with just a trusty backpack.

Here comes the maths...

The £429 base price for the 16GB wi-fi only iPad in the UK works out at £365 in "pre-VAT" pricing. At the current rate of exchange, this corresponds to $540 in the US, or a $41 premium for UK customers.

While that price difference is still not to be sniffed at, it is considerably smaller than it might appear at first glance.

Apple is also quick to point out that differences in international pricing are often due to increased distribution overheads, changes in exchange rates and the ever-so-slightly vague “cost of doing business" in other countries.

On a brighter note (for the Brits, anyway), at least Gordon Brown / David Cameron / Nick Clegg hasn’t imposed an ADDITIONAL UK tax on the iPad.

Over in Germany, the iPad’s classification as a “PC without disc-burner” has led to the local government applying an additional levy of €15 to Apple’s magical and revolutionary and burner-less device.

Not one to fail to apportion blame, Mr Jobs invites disgruntled German iPad fans to simply “blame your government.”

[source: MacRumours]