The UK coalition government has today announced its emergency budget, amongst which, are plans to increase VAT from 17.5% to 20% on 4th January 2011. Publishers and Booksellers were worried that the government may try to get rid of the 0% VAT on books, forcing the prices higher in an already difficult period for book sales. Ebooks and other digital content at the moment are levied with a VAT, hence the strangely higher price of an ebook over a paperback. That said, publishers are planning to enrich ebooks with extra content, e.g. exclusive galleries, book trailers, interviews and music, much like we already expect from DVDs.
On the other hand, we can expect the cost of videogames to go up as tax-breaks for the UK videogames industries have been scrapped. It follows that the industry will likely pass on the cost to end-users.