The latest issue of Private Eye (No. 1421 to 7 July 2016) notes that Microsoft UK is paying an amazingly low tax rate. We wondered how Office 365/2016 prices in the UK compare with those ‘across the pond’ in the USA? How much extra is Microsoft grabbing off UK consumers.
On page 5 of Private Eye notes that Microsoft sells over £3 billion in the UK but pays a measly £20 million in tax using an ‘advance pricing agreement’. The magazine also says that Microsoft UK money is sent through Bermuda and the ‘Double Irish‘ trick.
We did our usual comparison of Office prices which takes into account taxes and UK VAT as well as exchange rates.
The Office 365 subscription rates in the UK are between 3% and 9% more expensive than the US prices. The comparison is slightly worse since the Brexit decision on Friday and the following drop in the exchange rate.
Office 2016 ‘perpetual licence’ software is a very different story.
Office 2016 Home and Student sells for £120 in the UK, about 9% adjusted more than in the US
But Office 2016 Home and Business is £229.99 which is the same price number at in the US ($229.99). That means it’s 14% more expensive to buy in the UK.
In practice you’d be crazy (or a customer of the official Microsoft Store) to pay these prices. In both the US and UK, the same products can be bought cheaper elsewhere. Office 365 yearly licence is commonly discounted on both sides of the pond.
