Euro vs GBP pricing discrepancy

daytona0

Lots of valid points there.

Also, the link your provided to that EU legislation is basically saying that you can't charge (for example) French people more money than English people when they go shopping in the UK. In contrast, the online website will simply be specifying a universal price for ANYONE within the UK.

Think of it in terms of Tesco or Aldi. They have stores in both UK and Poland, but with two different currencies. The Poland ones are going to sell items much cheaper when converted from Zloty to GBP and UK stores will generally be more expensive. This is the EXACT SAME thing with your situation, only that you can physically see a different quotation for a different country when using a website. Tesco and Aldi simply don't list the Zloty price next to the items on the UK website because that website isn't intended for the Polish market!

unholyangel

SkyeKnight wrote: »

Purchase of products online is included in "services" - though that would not be the general English usage of the word services of course.

http://europa.eu/youreurope/citizens/shopping/shopping-abroad/buying-services/index_en.htm

A product is not necessarily goods. Goods refer to tangible items. Product refers to what they produce. For example insurance is a product but its not goods.


From the UK legislation guidance:

The Regulations apply to all businesses operating in a services sector, with important
exclusions. The Regulations work on the principle of ‘if you’re not specifically
excluded, you’re in’, so examining the list of excluded sectors may clarify what is in
scope. The sectors excluded are summarised in the section on scope below.

From UK legislation:

(1) In these Regulations “service” means any self-employed economic activity normally provided for remuneration (as referred to in Article 50 of the Treaty).

And from the gov.uk site that is about the implementation of the EU directive :

Services that UK consumers can get advice on include tourism services such as hotels, timeshares and car hire; construction services such as architects, builders, electricians and plumbers; estate agents and letting agents; private education providers such as language schools; and accountancy services and lawyers.

Now, if you can find anywhere in the legsialtion that makes a reference to goods, it'd be greatly appreciated. Because I've spent over an hour looking and I'm yet to find any mention of goods despite finding dozens and dozens examples of services.

DandelionPatrol

peachyprice wrote: »

Yes, it is true.

Do you know how much business banking charges are if £ hit a € account and vice versa? It isn't free, far from it.

They can choose to pay VAT either in the originating country or in the UK, if they have been paid in £ it makes sense to pay VAT in £ to HMRC rather than lose money in the conversion to €.

Charging VAT in the originating country under the single market only makes sense when dealing with customers in other countries using €.

No it is not true. If they only accept payment in €, then a £ will never hit a € account, so it will not make sense to involve HMRC.

Charging VAT in the country of origin makes total sense and is the only way any of my EU transactions has been conducted - I have had to bear the £ to € costs of course.

This is how the single market is supposed to work - and indeed does work. It is not done the way you suggest, for the exact reason you imply - it is too convoluted.

peachyprice

DandelionPatrol wrote: »

No it is not true. If they only accept payment in €, then a £ will never hit a € account, so it will not make sense to involve HMRC.

But they DO accept payment in GBP.

Charging VAT in the country of origin makes total sense and is the only way any of my EU transactions has been conducted - I have had to bear the £ to € costs of course.

Unless they accept payment in GBP, which they do.

This is how the single market is supposed to work - and indeed does work. It is not done the way you suggest, for the exact reason you imply - it is too convoluted.

Yes, it is. Don't ask me why people in € land do it this way, but I can assure you they do. First time I had an Austrian client who wanted me to put their GB VAT number on an invoice and add UK VAT to it it seemed strange, but it's actually quite common, particularly in Austria/Germany/NL/Belgium, not so much in France. Perhaps it's a tax loophole their end, I don't know, but I do know 100% that it is done that way when selling/buying to/from the UK.


Edit:

Somewhere, swimming around in the back of my head, there's something a German business woman told me about if a company's takings go over a certain amount their tax goes up, it was a while ago and it was a particularly boozy lunch, so the details are very vague, but I remember being outraged on her behalf because the takings threshold wasn't huge but the hike in tax was. I guess if you're collecting GBP into a GB account and paying GB VAT it would be a way around that.


Edit:
It's coming back to me. Once the company reaches the threshold the owners of the company are taxed on their personal assets ie. house, savings, shares etc.,

DandelionPatrol

peachyprice wrote: »

But they DO accept payment in GBP.


Unless they accept payment in GBP, which they do.



Yes, it is. Don't ask me why people in € land do it this way, but I can assure you they do. First time I had an Austrian client who wanted me to put their GB VAT number on an invoice and add UK VAT to it it seemed strange, but it's actually quite common, particularly in Austria/Germany/NL/Belgium, not so much in France. Perhaps it's a tax loophole their end, I don't know, but I do know 100% that it is done that way when selling/buying to/from the UK.


Edit:

Somewhere, swimming around in the back of my head, there's something a German business woman told me about if a company's takings go over a certain amount their tax goes up, it was a while ago and it was a particularly boozy lunch, so the details are very vague, but I remember being outraged on her behalf because the takings threshold wasn't huge but the hike in tax was. I guess if you're collecting GBP into a GB account and paying GB VAT it would be a way around that.

This is becoming confusing. Now that you are talking about invoices to your client, this is a sale from the UK, which is the other way around from OP's situation. Your client may do this if they have a large turnover in UK purchases and the VAT rate is lower [not the case in Austria] or there is some other tax advantage. But in any case, this is not greatly relevant to OP, who is a non VAT registered consumer, which is not a comparable situation to a VAT registered client.

As for the German business woman, her tale seems to equate to the UK situation, where small businesses below a certain size can opt to be non registered for VAT

sirweste

Very interesting replies, some knowledgeable folk on here - as I hoped.

When I looked through I could only find stuff relating to services, nothing to do with goods.

With regards the VAT complications - surely me asking to pay in EUR would negate this. There is another bike company in Germany (http://www.yt-industries.com/en/products/bikes/enduro/) who only accept payment in EUR, seems fine by me. You want a bike from them, then you need to fund any currency associated charges, sounds fair to me.

Forcing me to pay in GBP and then charging me 28% more doesn't seem fair.

The Tesco example doesn't quite work I feel, as I am buying a low volume product direct from the manufacturer.

daytona0

sirweste wrote: »

The Tesco example doesn't quite work I feel, as I am buying a low volume product direct from the manufacturer.

Did you mean my tesco example?

Here's an example I found for a low volume product!

http://www.tesco.pl/produkty/niezbedne-w-ogrodzie/grill/grill-wiaderko

http://www.tesco.com/groceries/product/details/?id=279773596


Poland = 30 Zloty (5.29 GBP) reduced from 40 Zloty (7.05 GBP)

England = 8.00 GBP


Try some other more expensive low volume products and see if it follows a similar pattern!

PS, the picture on the Polish website is much nicer too!

boo_star

I think the ultimate issue here is the reason for pricing it and their refusal to accept payment in Euros.

It's fine to say "we price it that way in GBP to stabilise pricing."

It's not OK to refuse to allow the purchaser to pay in Euros, after all it's not like taking Euros from a UK customer costs them any more.

sirweste

But tesco aren't the manufacturer, distribuor and retailer of said product. Canyon have fixed overheads for where ever they sell to, exluding shipping costs.

And yes, my issue here is that they are discriminating against me because I'm in the UK by not letting me pay in EUR and so therefore trying o extract an extra £800 out of me!

sirweste

Good morning,

I understand that other bike brands such as Santa Cruz or Norco would have different pricing for overseas. However, as an EU member I would not expect different pricing, I would even go as far as saying it might well be against EU trading directives. YT, the brand that many percieve as your direct competitor, do not charge more to a UK customer.
What other local markets within the EU do you price your products differently for?

I view it as discrimination that you insist on selling to someone from the UK at a 23% higher price (using the Strive CF Team as an example) than someone from Ireland/France/Spain....etc. I can apprecicate that you may wish to charge slightly more to take into account shifting currency conversion rates, however to refuse to let someone from the UK to pay in EUR (in which case the consumer is taking the currency transfer costs) is discrimination in my opinion.
Could you please tell me the reason that it is not possible for you to accept payment in EUR from an UK customer?

Thanks,
Ryan

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Dear Ryan West,

Many thanks for your e-mail.

In line with many other major brands Canyon prices its products specifically for each local market. This allows us to have a fixed price in each market for the whole season, and not expose customers to any exchange rate fluctuations.

So if you are buying a bike for delivery in the UK, the only way to do this is to pay in GBP/£ at the price shown on our website. Orders for the delivery to the ROI are priced in Euros.

It's not possible for orders that ship to the UK to be processed using the advertised Euro price, just the GBP one.


Sincerely,

Canyon Bicycles Ltd

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Dear Canyon.

If possible could you please reply to my previous email.
Is it possible for me to pay in euros for a bike then? Mitigating the need for a separate GBP price?

Thanks
Ryan

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Good morning,

Thanks for your prompt reply.
While I appreciate the significant advantages of fixed pricing within the business you must admit that for the customer the price discrepancy is fairly poor.
For the Strive Team the price in mainland Europe is £3500, but to have it invoiced and delivered to the UK (and we are presently still in Europe) the price is £4300.

So in summary, if you live in the UK you're looking at a 23% mark up on bikes....

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Forwarded message

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Hi Ryan,

With the launch of our 2015 range of bikes we’ve received some questions regarding our pricing structure in the UK. This year we’ve taken a different approach to our pricing strategy compared to previous years so we wanted to outline exactly why you are seeing a change.

In the past the UK prices for Canyon Bikes have been converted directly from the fixed Euro price of each bike. This meant that the advertised prices would change on a daily and sometimes weekly basis for UK customers as the exchange rate moved.

This presented a number of challenges for both us and our customers. In particular we did not feel it was fair to customers to bear the exchange rate risk. For Canyon UK internally, having prices change on a regular basis presented difficulties in dealing with customers who were subject to a price increase or decrease.

So, in line with many other brands selling products in different international markets we have decided for 2015 to establish a fixed GBP price. This gives customers the benefit of knowing the price will not change on a daily / weekly basis.

We do not charge the card until the bike is ready to be handed over to UPS.

Sincerely,

Canyon Bicycles Ltd




20/05/2015 18:24 -
wrote:




Message : Good afternoon,

I'm enquiring about pricing. The pricing on the site when set to EUR is
signicantly different from the price in GBP - using xe.com to convert. Could you
please explain the reason for this?

Could you also please confirm that the funds for the bike will not be withdrawn
until close to the bike is shipped?
I'm looking at placing an order for a Strive CF Team.

Thanks
Ryan