AidanDelaney
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Epetition to waive VAT on RPi

Thu May 24, 2012 1:54 pm

Dear all,
I set this up a while ago, but simply forgot to tell people about it
http://epetitions.direct.gov.uk/petitions/31417

It asks the UK government to waive VAT on the RPi. Simply because I think that the project has the potential to change the way we approach ICT/computer science at primary and secondary (and thereafter, third) level.

Since I've posted it (on twitter) I've had two points raised in criticism:
1) The petitioner just wants a cheaper RPi.
2) Schools don't pay VAT on purchases.

With regards to (1). Yes, I want a cheaper RPi for everyone. I've already bought my personal RPi and am playing with it. I don't see much substance in this point. In general if there's something that I'd like to buy, I would like to buy it at a cheaper price. Thankfully, I'm in a position that an extra £4 on the price of an RPi doesn't disincentivise the purchase.

Considering (2); I've spoken to a school bursar (no, this is not a scientifically valid survey) who assures me that the truth is more complex than not paying VAT on anything. However, my thinking is more about encouraging the parents of students to buy one for their household. In this case, and thinking that some schools have a high percentage of students who receive free school meals, any price reduction could be seen as an incentive for purchase.

So, if you agree with the petition, please sign it. I've included my response to the two critiacal points that I've seen raised in an attempt to get my explanation in first.

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MattPurland
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Re: Epetition to waive VAT on RPi

Thu May 24, 2012 2:06 pm

This seems rather pointless to me, as consumers we should be paying VAT, and if schools don't pay VAT then that's for them to sort out with the distributors (which they can do).

Or am I missing something here?

JoeDaStudd
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Re: Epetition to waive VAT on RPi

Thu May 24, 2012 2:07 pm

I'm all for waving VAT/taxes on the imported components for the RasPi then having it assembled in the UK.
However dropping the VAT completely I can never see happening as it would spiral out of control with every education product or hobbyist item also wanting to be VAT free.
Losing the government millions in taxes.

AidanDelaney
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Re: Epetition to waive VAT on RPi

Thu May 24, 2012 2:14 pm

@MattPurland: As I've pointed out, it's not that simple. They pay VAT and then claim it back on some things. Organising something with the distributors requires more organisation effort than can be reasonably requested from individial schools. But, I'm more interested in getting a cheaper RPi into the hand of the kid who's parents are hard-up for cash. Removing VAT helps this.

@JoeDaStudd: I think that the RPi is particularly deserving for removing VAT. In the end the Chancellor will (and does) make the decision as to what is deserving or not. We can only request that he considers the RPi.

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MattPurland
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Re: Epetition to waive VAT on RPi

Thu May 24, 2012 2:32 pm

AidanDelaney wrote:@MattPurland: As I've pointed out, it's not that simple. They pay VAT and then claim it back on some things. Organising something with the distributors requires more organisation effort than can be reasonably requested from individial schools. But, I'm more interested in getting a cheaper RPi into the hand of the kid who's parents are hard-up for cash. Removing VAT helps this.
Um, ok... I understand why you'd want to do this, but it will never happen. Everybody (as a consumer) will have to pay VAT on a commercial product (which the RasPi is). Maybe the government could implement a scheme for schools to allow pupils to purchase RasPis with VAT excluded? Regardless of the approach, there's going to be some admin/organisational effort.

Personally, what you're asking won't happen just because you'd like it to be cheaper (sheesh, it's only £29 delivered as it is, the model A will be even cheaper!)

prodata
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Re: Epetition to waive VAT on RPi

Thu May 24, 2012 2:35 pm

AidanDelaney wrote:Dear all,
I set this up a while ago, but simply forgot to tell people about it
Complete and total waste of time. VAT is simply not a system where individual product items can be exempted, however good the cause. You will get nowhere - give up now (assuming that it's a serious proposal which I doubt).

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grumpyoldgit
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Re: Epetition to waive VAT on RPi

Thu May 24, 2012 2:38 pm

Schools pay VAT on purchases in the normal way but keep records of the amount paid. At the end of the month, or whatever period has been agreed, they submit a from to claim it back. This system has been in operation for decades as far as I am aware.

tufty
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Re: Epetition to waive VAT on RPi

Thu May 24, 2012 2:49 pm

Does anyone actually pay attention to epetitions? Is there any proof that one has ever changed anything?

Simon

AidanDelaney
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Re: Epetition to waive VAT on RPi

Thu May 24, 2012 2:54 pm

@tufty If they get over a certain number of signatures then they have to be discsussed in the Commons at some level. They have led to debates in the commons before. Personally, I agree with the epitition (I would, I wrote it) and I see no harm in trying.

hippy
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Re: Epetition to waive VAT on RPi

Thu May 24, 2012 3:52 pm

I can't see it working. Those who can claim back VAT can and I don't see exemption for a single product and not a class of products being at all ideologically acceptable. To remove VAT on one product alone would be to give it an unfair commercial advantage.

The Foundation's goals are admirable but the R-Pi is a commercial product manufactured by others and not restricted in uses to those which match the Foundation's goals. Where goals and usage coincide, for example in education, VAT can already be reclaimed.

If there's a difficulty with educational establishments claiming VAT then that is a problem, and should be addressed, but it's not necessary to remove VAT on the R-Pi and, if we did, we'd see numerous manufacturers claiming an educational or essential role for their products and demanding VAT was removed for them.

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grumpyoldgit
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Re: Epetition to waive VAT on RPi

Thu May 24, 2012 4:22 pm

There are hundreds of manufacturers providing goods and services of an educational nature, either to schools direct or to the public. To try and pinpoint one product from one single manufacturer for special treatment is ridiculous. VAT rules have a broadbrush approach. Whole categories are either VATable, Zero rated or exempt. I am sure that Microsoft, Apple and dozens of other suppliers could create an argument just as valid as that represented by the Pi. As stated repeatedly, schools reclaim their VAT so the whole thrust of this proposal is sunk before it even starts.

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nick.mccloud
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Re: Epetition to waive VAT on RPi

Thu May 24, 2012 4:31 pm

VAT free is only for life's essentials. Given that it took years for this to change and even now are 5% rated, I doubt the Pi will ever qualify.

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grumpyoldgit
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Re: Epetition to waive VAT on RPi

Thu May 24, 2012 4:35 pm

Best not even ask if a Jaffa Cake is a biscuit or a cake.
A demonstration of how far HMI is prepared to go to argue a point.

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nick.mccloud
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Re: Epetition to waive VAT on RPi

Thu May 24, 2012 4:43 pm

Although according to this, as long as they are cooling down or cold, pies are already zero rated.

finnw
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Re: Epetition to waive VAT on RPi

Thu May 24, 2012 5:49 pm

tufty wrote:Does anyone actually pay attention to epetitions? Is there any proof that one has ever changed anything?

Simon
Yes.

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grumpyoldgit
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Re: Epetition to waive VAT on RPi

Thu May 24, 2012 5:58 pm

finnw wrote:
tufty wrote:Does anyone actually pay attention to epetitions? Is there any proof that one has ever changed anything?

Simon
Yes.
An interesting point, though I note the current government have decided not to issue a pardon. I think there is probably a difference between a popular swell of opinion where all that the government has to do is say sorry, compared with a complex technical issue that will cost the Treasury money. I think we would be much more likely to get a zero rated warm pasty than a zero rated cold pi.

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liz
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Re: Epetition to waive VAT on RPi

Thu May 24, 2012 6:54 pm

My very, very dear friend Oggie, who died in 2007, was the lead developer on the e-petitions website. The last time I saw him, a couple of days before he died, he was ripping his (plentiful) hair out over the amount of frivolous bullshit people were posting to it; I specifically remember him mentioning a petition to make Tony Blair take a bath in baked beans with a degree of fury.

I suspect this petition has a similar chance of succeeding.
Director of Communications, Raspberry Pi

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MattPurland
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Re: Epetition to waive VAT on RPi

Thu May 24, 2012 7:28 pm

liz wrote:My very, very dear friend Oggie, who died in 2007, was the lead developer on the e-petitions website. The last time I saw him, a couple of days before he died, he was ripping his (plentiful) hair out over the amount of frivolous bullshit people were posting to it; I specifically remember him mentioning a petition to make Tony Blair take a bath in baked beans with a degree of fury.

I suspect this petition has a similar chance of succeeding.
+1

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Jim Manley
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Re: Epetition to waive VAT on RPi

Thu May 24, 2012 11:44 pm

If a Twinkie can be classified sales tax exempt for being "food" in some U.S. state jurisdictions, I'd cite that as overwhelming precedent that a Raspberry Pi can be classified as "food" ... for the mind! A lot worse could be done in depriving government bureaucrats of the lifestyle to which they have become accustomed.

I realize your tea is just completely sacrosanct, but, surely you can come up with an appropriate substitute to dump in a convenient nearby harbor in emulation of the little soirée we hosted in Boston in 1773 (RoHS manufactured old Windoze PCs used for ICT, perhaps?). You would be amazed how much attention you can garner and, in today's 24/7 news cycle, you need every advantage you can muster! Oh, and The Revolution will be televised, given the ubiquity of YouBoob and phones with cameras these days ;)
The best things in life aren't things ... but, a Pi comes pretty darned close! :D
"Education is not the filling of a pail, but the lighting of a fire." -- W.B. Yeats
In theory, theory & practice are the same - in practice, they aren't!!!

rasbeer
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Re: Epetition to waive VAT on RPi

Fri May 25, 2012 6:49 am

prodata wrote:VAT is simply not a system where individual product items can be exempted, however good the cause.
True, but many classes of products are exempted. See the VAT treatment of [urlhttp://en.wikipedia.org/wiki/Jaffa_Cakes#Cake_or_biscuit.3F]Jaffa Cakes[/ul] for an example of how much sense this makes.

There's no reason why there shouldn't be a VAT exempt category for something like 'ultra-low cost bare-board educational computers'.

prodata
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Re: Epetition to waive VAT on RPi

Fri May 25, 2012 7:35 am

rasbeer wrote:
prodata wrote:VAT is simply not a system where individual product items can be exempted, however good the cause.
True, but many classes of products are exempted. See the VAT treatment of [urlhttp://en.wikipedia.org/wiki/Jaffa_Cakes#Cake_or_biscuit.3F]Jaffa Cakes[/ul] for an example of how much sense this makes.
You're not understanding the issue here. It's not that Jaffa Cakes are an exempt class of product, the issue is this product falls right at the boundary of two major classification categories: food (exempt) and snacks (not exempt). I may not have exactly the right category names here but the principle is clear. Then whenever you have an item right at the boundary, there's a debate to be had about which category it actually falls in. Similarly, with the infamous pasties - it's just a matter of exact interpretation of well-established definitions.

There is just no such parallel with the Pi (or any other similar devices) - The Pi falls squarely and unambiguously into the category of non-exempt items. It's not a boundary case in any sense whatsoever.
There's no reason why there shouldn't be a VAT exempt category for something like 'ultra-low cost bare-board educational computers'.
Dreamland!

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alexeames
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Re: Epetition to waive VAT on RPi

Fri May 25, 2012 7:40 am

prodata wrote:
You're not understanding the issue here. It's not that Jaffa Cakes are an exempt class of product, the issue is this product falls right at the boundary of two major classification categories: food (exempt) and snacks (not exempt). I may not have exactly the right category names here but the principle is clear.
I remember this case. Customs and Excise said it was a biscuit (VATtable) McVitties said it was a cake (exempt). In the end they won the case by baking a huge one and asked the court if it was a biscuit or a cake. The answer was obvious and McVitties won. :D
Alex Eames RasPi.TV, RasP.iO

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grumpyoldgit
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Re: Epetition to waive VAT on RPi

Fri May 25, 2012 7:49 am

prodata wrote:
rasbeer wrote:
prodata wrote:VAT is simply not a system where individual product items can be exempted, however good the cause.
True, but many classes of products are exempted. See the VAT treatment of [urlhttp://en.wikipedia.org/wiki/Jaffa_Cakes#Cake_or_biscuit.3F]Jaffa Cakes[/ul] for an example of how much sense this makes.
You're not understanding the issue here. It's not that Jaffa Cakes are an exempt class of product, the issue is this product falls right at the boundary of two major classification categories: food (exempt) and snacks (not exempt). I may not have exactly the right category names here but the principle is clear. Then whenever you have an item right at the boundary, there's a debate to be had about which category it actually falls in. Similarly, with the infamous pasties - it's just a matter of exact interpretation of well-established definitions.

There is just no such parallel with the Pi (or any other similar devices) - The Pi falls squarely and unambiguously into the category of non-exempt items. It's not a boundary case in any sense whatsoever.
There's no reason why there shouldn't be a VAT exempt category for something like 'ultra-low cost bare-board educational computers'.
It was cakes and biscuits. VAT is paid on chocolate covered biscuits but not on chocolate covered cakes. The Man argued that the Jaffa Cake was a biscuit and therefore subject to VAT. McVitie countered this by bringing in a cake sized Jaffa Cake to show it was really a cake. It all hinged on the definition of biscuit and cake, which didn't exist. In the end it was decided that a biscuit starts off hard and then goes soft, while a cake starts off soft and then goes hard. McVities won the case.

The moral of the story is that if you called the Pi a pie or covered it in chocolate, you might just get away with the zero VAT issue, but otherwise the Man will get his pound of flesh.

hippy
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Re: Epetition to waive VAT on RPi

Fri May 25, 2012 10:34 am

rasbeer wrote:There's no reason why there shouldn't be a VAT exempt category for something like 'ultra-low cost bare-board educational computers'.
Exemption would have to be on the basis of purpose of use not price so it would need to be exemption for "bare-board educational computers". You then need to define "bare-board computers" and "educational computers" and decide which fit the definitions and which do not.

That would be a nightmare to actually define and implement, is inviting motherboard manufacturers to claim their products fit the VAT exempt category and may even see the R-Pi excluded from it! It didn't go so well for the R-Pi claiming to be a "developer board" and thus exempt from CE requirements.

It is far easier to make VAT applicable to all computers and allow those who put them to defined legitimate educational use to reclaim the VAT, which is what already exists.

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