This years UK tax budget announced no new games industry tax relief but did suggest a tax loophole may bring an end to 69p and cheaper game purchases. The loop hole that was closed relates to how online retailers can sell products from outside the UK for less than a retailer inside by avoiding the 20% VAT tax added to the majority of purchased items in the UK.
Currently, retailers can sell products from offshore locations to avoid the VAT (although Ireland has 23% tax rates where Apple sells from) meaning they can sell for less. The solution the Government has, to make tax payable based on your location and not the retailer. That means that anyone in the UK would be charged the 20% rate regardless of retailer location.
What could this look like when it comes into affect? A 69p app will creep up to 79p; a £6.99 Steam game will rise to £8; and a £34.99 full-priced release will be £40. This change could in turn bring in £300m for the Treasury which has previously gone to other countries like Luxembourg.
The new change will take effect on the 1st January 2015.
Read more at The Guardian