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Affinity designer price


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I have been a user of pageplus since version 1 and also use draw plus, photoplus, impactplus, movieplus - yes I am a Serif fan.

 

I have been offered Designer at £29.99 which includes VAT.

 

I live in Jersey - not in the UK or Europe so no VAT.

 

But attempts to get it at the correct price of £24.99 are meeting with zero response.

 

Come on Serif - you have always charged me net of VAT in the past - why the change

 

CRG

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In our new Affinity Store we do not currently distinguish the Channel Islands as an independent price band, so I don't think the price is incorrect. This follows the pricing on the Mac app store for UK sales.

 

You are currently paying the same as others in the United Kindgom, although you used to pay less than them, true.

Patrick Connor
Serif Europe Ltd

"There is nothing noble in being superior to your fellow man. True nobility lies in being superior to your previous self."  W. L. Sheldon

 

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Dear Patrick

 

There is a fundamental situation here.

 

You should NOT be paying the VAT to the government on non-UK orders.

 

You should charge it at ZERO VAT and I pay the net amount. Simple. I have copied the VAT rules to your sales dept.

 

The 20% discount is a red herring. I am still paying you the same amount as you are getting on UK orders except on those you are paying £5 to HMRC.

 

You DO NOT HAVE TO PAY IT ON NON-UK ORDERS.

 

Therefore you should only charge me £24.99 and you receive all of it, instead of charging £29.99 and paying £5 in tax - net result £24.99.

 

I am not in the UK and do not pay tax to the UK.

 

Kindest regards

 

C R Goss

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you should only charge me £24.99 and you receive all of it, instead of charging £29.99 and paying £5 in tax

 

Or instead of charging £29.99 and keeping all of it since there's no VAT to pay!

 

I replied to Patrick's post shortly after he made it, but my post was deleted. Fortunately, Google came to my rescue and cached the page, so I know I wasn't imagining that I had submitted my reply.

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Alfred spacer.png
Affinity Designer/Photo/Publisher 2 for Windows • Windows 10 Home/Pro
Affinity Designer/Photo/Publisher 2 for iPad • iPadOS 17.4.1 (iPad 7th gen)

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HMRC Published VAT rules

 

2.1 What is meant by VAT zero-rating?

A zero-rated VAT supply is one which is subject to VAT but where the VAT is at 0%.

 

2.2 Why does zero-rating apply to exports?

VAT is a tax levied on goods and services consumed in the EC. When goods are exported they are ‘consumed’ outside the EC and to impose VAT on such goods would be contrary to the purpose of the tax. Therefore, the supply of exported goods is zero-rated provided certain conditions are met.

 

2.4 What is meant by ‘an overseas person’?

This means a person or company who is not resident in the UK or has no business establishment in the UK from which taxable supplies are made, or is an overseas authority.

 

2.7 Which countries are part of the UK for VAT purposes?

The UK consists of England, Scotland, Wales, Northern Ireland and the waters within twelve nautical miles of their coastlines. Although the Isle of Man has its own VAT authority, sales to the Isle of Man are treated as any other sale within the UK.

The Channel Islands are part of the Customs territory of the EC, but are outside the EC, including the UK, for fiscal (VAT) purposes. Supplies of goods sent to the Channel Islands are regarded as exports for VAT purposes and may be zero-rated if the conditions set out in paragraph 3.3 or 3.4 are met. See paragraph 7.12 for information about evidence of export of goods to the Channel Islands.

 

I don't think the rules can be any clearer - so why are Serif (and Apple Mac) flouting the UK Government rules?

 

I am ready to buy right now at 24.99...........

 

C R Goss

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E9B6,

 

Thank you for your references, but Serif are not paying the vat on your order, as you see in the shop total. What you see is that Serif are charging the same in our shop for your location as for those who are elsewhere paying tax, because it's what we see as fair. I am not sure that it would be right to charge you less. We are not paying VAT on sales to many other countries either, but that doesn't change the price. If you select an EU country we charge VAT If you select a non EU country we don't, but it isn't cheaper. To illustrate why it is correct for the Chanel Islands, there are other countries where the VAT rate varies. Set the country to France and note the 20%vat... the price is currently €39,99 (inc €6,67 VAT @20%) now set it to Finland or Greece, note the 24%vat... the price is still €39,99 (inc €7,74 VAT @24%). We take the hit in Finland, the way we take the hit in the UK. Our price is £39.99 reduced to £29.99 when on offer. From that we pay taxes and then we pay wages and costs and then if there's anything over we invest in R&D and then there's a bit of profit.

 

If you don't want it for the price we sell it for that is sad, but OK.  

 

For VAT registered companies we may add a way to buy without the VAT but right now we don't even have that (they can email us for special arrangements to be made).

Patrick Connor
Serif Europe Ltd

"There is nothing noble in being superior to your fellow man. True nobility lies in being superior to your previous self."  W. L. Sheldon

 

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Thank you for your references, but Serif are not paying the vat on your order, as you see in the shop total.

 

In other words, it's just as I said:

 

charging £29.99 and keeping all of it since there's no VAT to pay

 

Serif are making an extra £5 profit every time they sell the product to a customer who happens to live in the Channel Islands.

 

What you see is that Serif are charging the same in our shop for your location as for those who are elsewhere paying tax, because it's what we see as fair.

 

Wouldn't it be fairer to let the customer keep the £5? Having said that, Patrick, I do take your point about the effects of the VAT rate being higher than 20% in some EU countries. (Presumably this will all be academic in a couple of years time, once we've left the EU!)

Alfred spacer.png
Affinity Designer/Photo/Publisher 2 for Windows • Windows 10 Home/Pro
Affinity Designer/Photo/Publisher 2 for iPad • iPadOS 17.4.1 (iPad 7th gen)

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I think HMRC would be very interested in Serif's interpretation of their rules - which clearly state 'The text in this box has the force of law'. Whilst in my case it is only £5, that is not the point. Serif are not applying the VAT rules according to the Law, and I cannot believe that they would open themselves up in this way.

 

I want the product so will have to pay 29.99, but I would not be surprised if HMRC come knocking on Serif's door!

 

CRG

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Serif you may wish to amend the price as published on your website. By stating that the price is 29.99 including VAT at 5.00 you are laying yourselves wide open. As Exports to the Channel Islands are rated at zero%, you cannot arbitrarily amend the price to 29.99.

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On a completely different tack.............did you know that some travel insurance companies class the Channel Islands as being in the UK, therefore they will not pay any medical claims whilst you are on holiday there. They state that you are covered by the NHS !!!! To add more to the confusion, I think Jersey has a reciprocal agreement and you would be covered..............but Guernsey does not !!!  Interesting times.......... :ph34r:

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Serif you may wish to amend the price as published on your website. By stating that the price is 29.99 including VAT at 5.00 you are laying yourselves wide open. As Exports to the Channel Islands are rated at zero%, you cannot arbitrarily amend the price to 29.99.

We can look at this again, but if we had claimed it was £24.99 plus VAT (or to quote £29.99 including vat @ 20%), then you would be 100% correct. However to quote £29.99 including vat (at 20% for UK and 0% for the Channel Islands) is not incorrect as I see it. Anyhow, thank you for your comments and your purchase, it is appreciated. The finance team are aware of this discussion.

Patrick Connor
Serif Europe Ltd

"There is nothing noble in being superior to your fellow man. True nobility lies in being superior to your previous self."  W. L. Sheldon

 

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  • 9 months later...

Sorry for digging up this old thread, but I guess it's smarter than creating a new, similar one.

The finance team are aware of this situation for 10 months now, but the case is not closed.
There are still 23% VAT invoices whereas they should be 0% for EU VAT registered companies.

I wrote an e-mail (to affinityorders@serif.com) about VAT tax on my invoices - saying they are incorrect with the current EU tax law.
Got an answer that platform you use is not able to process orders without VAT but you could change VAT amount to 0% on my invoice, but not price after all.
My accountant couldn't find words, to say the least :)

Sorry but I don't see how platform can change the tax law we all have to follow.
As a EU VAT registered company I'm not obliged to pay the additional tax on top of the price.

The invoices would need to show 195.11 PLN + 0% VAT, so my total payment should be 195.11, not 239.99.
It's 90PLN (2 orders) diferrence between what I've paid and what should have been charged in my case (company purchase).

Selling platform not able to process orders without VAT is one thing, but surely there's a way to correct invoices AND payments (for companies), so they follow European tax rules.

Clearly, you must understand that there's a huge legal difference between 195.11 + 23% VAT and 239.99 + 0% VAT.
As E9B6 has already stated - it's not just a price issue anymore (I would have paid it even if it was more), so Serif should be careful about it's ways of approach.

I really appreciate your software, support and community, but it's time for legal stuff to be sorted out. It just can't go on forever :)

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55 minutes ago, m.wieckowska said:

Sorry for digging up this old thread, but I guess it's smarter than creating a new, similar one.

The finance team are aware of this situation for 10 months now, but the case is not closed.
There are still 23% VAT invoices whereas they should be 0% for EU VAT registered companies.

I wrote an e-mail (to affinityorders@serif.com) about VAT tax on my invoices - saying they are incorrect with the current EU tax law.
Got an answer that platform you use is not able to process orders without VAT but you could change VAT amount to 0% on my invoice, but not price after all.
My accountant couldn't find words, to say the least :)

Sorry but I don't see how platform can change the tax law we all have to follow.
As a EU VAT registered company I'm not obliged to pay the additional tax on top of the price.

The invoices would need to show 195.11 PLN + 0% VAT, so my total payment should be 195.11, not 239.99.

 

The PLN price of 239,99 zł for a Tier 50 product in the Mac App Store includes VAT at the standard Polish rate of 23%. Software purchases are not zero-rated, so it would be incorrect for the invoice to show the price as 195,11 zł + 0% VAT.

 

VAT-registered companies and sole traders in the UK can reclaim VAT paid on goods and services if they are legitimate business expenses. Are you unable to do this in your country?

 

Alfred spacer.png
Affinity Designer/Photo/Publisher 2 for Windows • Windows 10 Home/Pro
Affinity Designer/Photo/Publisher 2 for iPad • iPadOS 17.4.1 (iPad 7th gen)

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@m.wieckowska Just to confirm, are you using the Mac or Windows versions of the Affinity software? If they are the Mac versions then you bought them through the Mac App Store for your country (Poland?), and as Alfred mentioned, Apple determines the net price & VAT, not Serif. As I understand it, under applicable law the reseller is considered to be Apple, doing business as an entity located in your store's country, which determines how VAT is applied, the rules for credit/reimbursement, etc.

All 3 1.10.8, & all 3 V2.4.1 Mac apps; 2020 iMac 27"; 3.8GHz i7, Radeon Pro 5700, 32GB RAM; macOS 10.15.7
Affinity Photo 
1.10.8; Affinity Designer 1.108; & all 3 V2 apps for iPad; 6th Generation iPad 32 GB; Apple Pencil; iPadOS 15.7

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46 minutes ago, R C-R said:

@m.wieckowska Just to confirm, are you using the Mac or Windows versions of the Affinity software? If they are the Mac versions then you bought them through the Mac App Store for your country (Poland?), and as Alfred mentioned, Apple determines the net price & VAT, not Serif.

 

It doesn't matter which version you buy. The Affinity Store prices for the Windows versions are governed by the same pricing matrix as the Mac App Store uses for the Mac versions.

 

Alfred spacer.png
Affinity Designer/Photo/Publisher 2 for Windows • Windows 10 Home/Pro
Affinity Designer/Photo/Publisher 2 for iPad • iPadOS 17.4.1 (iPad 7th gen)

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1 hour ago, Alfred said:

It doesn't matter which version you buy. The Affinity Store prices for the Windows versions are governed by the same pricing matrix as the Mac App Store uses for the Mac versions.

I don't know much about VAT laws around the world, but apparently there are some significant legal differences for items that are considered to be imports resold by foreign entities. That is why I emphasized the "located in your store's country" phrase. It all seems very convoluted because even within the EU the legal determination of foreign vs. domestic sellers varies by country. So it seems possible that this could matter if Apple is considered a domestic reseller & Serif a foreign one, at least for determining what entity is violating/misinterpreting the relevant laws.

 

Regardless, as I understand it VAT is a consumption tax based everywhere except in Japan on a 'credit-invoice' model, meaning eligible businesses receive credit against their VAT liability, not refunds or adjustments from sellers.

 

But I am not a lawyer/barrister or anything close to it, so please take all of the above with a very large grain of salt.

All 3 1.10.8, & all 3 V2.4.1 Mac apps; 2020 iMac 27"; 3.8GHz i7, Radeon Pro 5700, 32GB RAM; macOS 10.15.7
Affinity Photo 
1.10.8; Affinity Designer 1.108; & all 3 V2 apps for iPad; 6th Generation iPad 32 GB; Apple Pencil; iPadOS 15.7

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I've bought PC version from Affinity store (UK).

Software purchase is considered to be import of services, not a basic good purchase and is connected strictly with reverse charge procedure:
- VAT can not be charged to foreign VAT payers,
- collection of VAT rests on the end trader who is responsible for paying all the VAT to the authorities,
-
the following words must be stated on the invoice: “REVERSE CHARGE”.

I'm not tax payer in the UK according to law.
At this point, with 23% VAT invoice for import of services I'm not able to reclaim paid VAT.

I know Serif doesn't like to be compared to Adobe, but please note that Adobe is in fact charging only net price with 0% VAT for a VAT EU registered company (please, check the attachment).
And it is the only legal way to charge VAT registered companies within the European Union at this moment.

Please, get your legal team to research reverse charge procedure for foreign buyers (VAT EU registered companies).
Rate 23% is only legal when you charge it to private individuals.

I'm not a lawyer/barrister myself, that's why I hire an accountant - to enlighten me once a month on the mistakes I, and in this case, other entities made.

vatcharge.jpg

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14 minutes ago, m.wieckowska said:

Software purchase is considered to be import of services, not a basic good purchase and is connected strictly with reverse charge procedure:
- VAT can not be charged to foreign VAT payers,
- collection of VAT rests on the end trader who is responsible for paying all the VAT to the authorities,
-
the following words must be stated on the invoice: “REVERSE CHARGE”.

I'm not tax payer in the UK according to law.
At this point, with 23% VAT invoice for import of services I'm not able to reclaim paid VAT.

I know Serif doesn't like to be compared to Adobe, but please note that Adobe is in fact charging only net price with 0% VAT for a VAT EU registered company 

 

Like you, I am not a lawyer or an accountant, but I think I see where the confusion is coming from. In your example of a Photoshop CC subscription, you are indeed purchasing a service. If Affinity Designer were subscription-based, then you would also be purchasing a service, but it isn't; when you purchased Affinity Designer, you purchased (a licence to use) downloadable goods.

Alfred spacer.png
Affinity Designer/Photo/Publisher 2 for Windows • Windows 10 Home/Pro
Affinity Designer/Photo/Publisher 2 for iPad • iPadOS 17.4.1 (iPad 7th gen)

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12 minutes ago, m.wieckowska said:

Software purchase is considered to be import of services, not a basic good purchase and is connected strictly with reverse charge procedure

 

I am in no way qualified to say if this is applicable or not, but according to this source:

Quote

In simple terms, the Reverse Charge moves the responsibility for the recording of a VAT transaction from the seller to the buyer of a good or service.

Would that not be you, the buyer of the software license?

 

Also from the same site is this page about 'distance selling,' which is applicable (somehow) to cross-country internet sales ... among EU member countries. Add Brexit to the mix & I have to wonder if anybody is qualified to sort all this out. :S

All 3 1.10.8, & all 3 V2.4.1 Mac apps; 2020 iMac 27"; 3.8GHz i7, Radeon Pro 5700, 32GB RAM; macOS 10.15.7
Affinity Photo 
1.10.8; Affinity Designer 1.108; & all 3 V2 apps for iPad; 6th Generation iPad 32 GB; Apple Pencil; iPadOS 15.7

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Alfred, unfortunately whether it's subscription based or not, software bought outside country is still considered as import of services (not goods - since It's downloadable version and not physical) and therefore need to be processed with reverse charge.
It's my accountant words and I trust her more than speculations :)

Yes RCR, this would apply to me.
I'm the buyer of the software licence outside my country, therefore I'm the one responsible for paying all the VAT to the Polish authorities (once again - I'm not obliged to pay taxes to the UK).
That would lead to simple conclusion - Serif CAN'T pay my taxes, so should not have been charging me with VAT tax.
Since VAT was paid by Serif to UK authorities, I simply can't demand a refund from Polish authorities, and that's logical.


Please bear in mind that all of this applies to vat eu registered companies, not private individuals.

http://www.avangate.com/avangate-resources/article/software-vat.htm

Please, take a look at the table seen in the article above.

Invoice Issuer Invoiced Part VAT Application
EU resident [company with VAT ID] Same EU country Yes
  Other EU country [company with VAT ID] No (Reverse Charge)
  Other EU country [company without VAT ID or private person] Yes
  Outside EU No
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