UK budget closes music download loophole

The taxman has set his sights on your iTunes

Say goodbye to 99p song downloads as the new budget sees 20% VAT being added to the price of digital downloads. Woe betide iTunes connoisseurs

Prices on iTunes, Google Play and more are set to rise after the UK government announced in the new budget that it would start tacking 20 per cent VAT onto all digital downloads.

The new law (first reported by the Guardian) will ensure your virtual purchases will be taxed in the country where they’re purchased. Books, songs, videos, and apps will all be affected by the new digi-tax.

This could mean to end of 79p songs on iTunes or indeed any digital download service like Google Music or Sony's Entertainment Network.

The changes will hit your wallet from the 1st January 2015, with officials estimating a resultant boon for the treasury to the sum of £300m.

Currently, web firms have can flog their wares through loophole nations like Luxembourg at a more capitalist-friendly tax rate of 3%.

Google Play, Amazon, and iTunes, amongst others, will all be affected by the changes.

It’s unclear whether the change will affect streaming services like Spotify or Netflix, which aren’t technically digital downloads.

Osborne also vowed to crack down on tax avoidance, targeting some of tech corporations less than eager to cough up dough for the exchequer.

by Sean Keach