back to article Apple admits iPhone apps not suitable for business

Apple is reminding customers that applications sold through the iTunes store are strictly for non-commercial use: business use is forbidden, which makes one wonder what that section of the store is for. Apple certainly gives the impression that the iPhone is suitable for businesses, and the Business section of the iTunes …

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  1. Mike Watt
    Jobs Horns

    TV

    Don't forget the TV ads they've been running to show off their business apps.

  2. Andy ORourke
    Joke

    Question Answered

    "Which begs the question: who is buying "Ring It Up, Point Of Sale" for their personal use, or is everyone just ignoring Apple's terms and conditions?"

    Card scammers obviously!

  3. D@v3
    FAIL

    not for business?

    Maybe they should tell o2 who have them available on a business tarif...

    http://businessshop.o2.co.uk/phones_index.aspx?y=1&groupid=6

  4. Richard Gadsden 1
    Jobs Horns

    Ignoring Apple's Ts&Cs

    Of course everyone is ignoring Apple's Ts&Cs, but the real problem is that if businesses do buy applications through the App Store, then they can't reclaim the VAT - which just means that the EU govermments make more in VAT.

    I'm sure that the Irish government will be very happy to get 21.5% VAT on every single app, even when bought by a VAT-registered business.

  5. David Edwards

    Business Tarrifs then

    So anyoen on a business tarrif should be blockd fromt eh Ap store. They need to sort this out, while its the odd £2.99 ap its not worth claiming back, but VAT on the TOM TOM etc at £60+ is worth geting bothered about. Especially if deployed to a team etc.

  6. Annihilator

    Why iPhone for business??

    Why on earth would anyone use an iPhone for corporate use.

    The fact that deleted emails can STILL be found in Spotlight would immediately veto such a tool in a business environment.

  7. Samuel Williams
    Jobs Horns

    Hipocrisy? There's an app for that.

    Have I not seen Apple's own ads on telly featuring applications that take credit card details and produce invoices? Maybe it's just meant for easing those awkward transactions when dividing restaurant bills...

  8. SuperTim
    Jobs Horns

    Apple = Devious

    It could be argued that the phrase "business apps" would override the licence "personal use" as the two are wholly conflicting. We also have legislation against unfair contracts, which seems to be where this may head. To suggest business software is available but then hide its non-commercial nature in small print may get them in trouble. Besides, it could be argued that any good accountant could get the tax back despite apple's lack of help. I suspect that apple are going to be investigated very thouroughly soon by the OFT due to their restrictive attitude towared competition and fair trade.

  9. SImon Hobson Silver badge

    Simple solution ...

    All it needs is for one customer to ask for a receipt for their purchase. If Apple refuse, or if they provide one but don't identify the tax, then they are breaking the law - so report them for illegal trading.

    And I'd like to see them justify the non-commercial use only clause as "fair and reasonable" should anyone challenge it.

  10. Anonymous Coward
    Anonymous Coward

    When it suits them.

    Given this highlighting of the T&Cs can we report Apple to the OFT and ASA based on their blatant claims in marketing and by having that section on their site, that they are trying to sell to business therefore have to stump up the VAT details to reclaim?

    Oh wait.. its a large US multinational, silly me, laws and taxes do not apply.. (MS, Google, Apple etc etc).

  11. Dave 142

    bothered?

    I imagine this is more a 'can't be bothered' approach for the EU, especially given the lower penetration here compared to the US. It does ignore the business distribution that Apple allow for the iPhone though.

  12. This post has been deleted by its author

  13. David Halko
    FAIL

    You gotta love...

    You gotta love the tax man!

  14. Anomalous Cowherd Silver badge

    Amazon are much worse.

    Try hosting your application on the Amazon EC2 cloud and see what sort of invoice you get - it lists amount, "tax" and total amount. No VAT number, no VAT rate, not even a currency. Try claiming that back.

    http://developer.amazonwebservices.com/connect/thread.jspa?messageID=128334&#128334

  15. northern monkey

    Erm...

    ...so are apple saying that the person in the advert in which they make a card transaction, generate a receipt, setup the shipping etc. is doing it for pleasure? Perhaps this would actually be a useful case for the ASA to intervene in, rather than their usual 'my child, if I had one, could be offended by the overly large package the new and improved Mr Muscle is packing' moans.

  16. This post has been deleted by its author

  17. lolcat
    Thumb Down

    LOL

    Based on comments to one unnamed customer? Wow, The Register has sunk to new lows in order to attack the iPhone. Why are you brit types so desperate to attack Apple and the iPhone? Because Apple isn't a British company? Because it reminds you that Americans are the leading English speakers of the world? I mean seriously your desperation is coming off a bit desperate. Why bash the iPhone constantly when the tech world is filled with crap products? I mean seriously I use to have a bit of respect for this rag but it is rapidly going down the tubes with over 9000 new anti iPhone articles published every day.

  18. Anonymous Coward
    Stop

    Confused

    I am trying to buy an iPhone (alas, there are no 3GS phones available where I live). However, this is a most interesting article because I want to use the phone for business use.

    Here is my confusion.

    1. Apple claim the iPhone is a good business phone (http://www.apple.com/uk/iphone/enterprise/)

    2. The only way to "manage" an iPhone (i.e. install apps) is to use iTunes

    3. iTunes Terms and Conditions state apps can't be used for business

    Obviously, 1 is incorrect then ? Gartner Group need to be alerted to this so any companies who subscribe to their service will be alerted to this preposterous position... this would serve them right for their laziness. I also think the Advertising Standards Association (who regulate online advertising) should be alerted to their page which states the iPhones is "The best phone for business".

    Despite all this, I still think I want one (if only I could get one!) but Apple should be penalised for their laziness. Set up a "Business" apps store if necessary.

  19. John Ellin
    Big Brother

    Luxury items

    Did they ever resolve the taxable difference between chocolate cake and chocolate biscuits ?

    Mmmmmmm Jaffa cakes.

  20. Avalanche

    European troubles?

    I thought the VAT laws in Europe were pretty much unified, so I think most things applies in the whole of Europe. I do seem to remember that in the Netherlands on sale the seller always needs to provide a VAT statement if so requested by the customer. Most stores (both on- and offline) include a VAT statement by default on the bill or saleslip. The 'personal use only' is not a valid excuse here for not providing a VAT statement.

  21. frank ly Silver badge
    Stop

    A thought...

    "...why anyone would want a Sales Customer Relationship Manager for their personal, non-commercial, use..."

    "..who is buying "Ring It Up, Point Of Sale" for their personal use.."

    Drug dealers? Prostitutes? Just a thought, I'm going with my imagination here. (I assume that drug dealers and prostitutes don't register with the Inland Revenue or with Customs and Excise, so they don't need VAT receipts anyway)

  22. Anonymous Coward
    Gates Horns

    Illogic at its best

    It appears that when this is brought to light with the relevant authorities, Apple will then have to change the T& C's or just have to stop selling the Iphone and/or the business apps. Guess what will happen...

  23. Richard Fletcher
    WTF?

    Apple get to decide?

    I don't see how Apple get to choose. Either they are selling as UK sellers and have to register for VAT if turnover exceeds £60K or they are selling from abroad and app purchase counts as import, in which case the sales tax should be declared to the tax man on import (if outside EU).

    Whether a purchase is a legitimate one for business use is decided by the tax man at the end of the day. Not apple.

    Am I missing something?

  24. Anonymous Coward
    Jobs Horns

    Jaffa Cakes

    It was a cake

    "For example the infamous UK Jaffa Cake case. Biscuits and cakes are considered a necessity by UK law and are zero rated. Chocolate-covered biscuits however are a luxury and subject to VAT at 17.5%. McVities and HM Customs & Excise2 argued over whether the Jaffa Cake was a cake (no VAT) or a chocolate biscuit (lots of VAT). The argument had to be taken to a tribunal (kind of like a court) to be resolved. In the end McVities baked a 12" Jaffa Cake which convinced the tribunal Chairman of the general cakeiness of the Jaffa Cake. "

    http://www.bbc.co.uk/dna/h2g2/A4803040

    Mmmmmmmmmm Jaffa Cakes

  25. Version 1.0 Silver badge
    FAIL

    Long Time Policy?

    Many years ago - when the Apple Mac was a new product - my company was selling fancy Graphics Terminals for about $7k upwards. We discovered that an Apple Mac (then about $2k) with a $400 software program could reliably emulate a $7k graphics terminal for our purposes.

    So we tried to get our local Apple store to sell us Macs for "resale" to our customers - and were told that this was completely forbidden and that we would be sued if we purchased Macs and resold them.

    So we switched to selling IBM PC's with an MSDOS emulator (EM4105) instead - we must have sold about a thousand of them...

  26. bigphil9009

    @lolcat

    okaaaaaaaay....

  27. Anonymous Coward
    Happy

    Maybe it goes deeper than that?

    Perhaps, just perhaps the Exchange stuff that happens it limited by licence to non-commercial use,

    Which is a tres tres great shame given how easy it is (ermmmm ) would be to run a mobile workforce using iPhone as internal and external and only phone per employee in the company.

    Who needs a copper wired network anymore?

    Next big thing (assuming nullified non-coms on stuff) iPhone for the desk and desktop?

  28. G l e n n

    Apple are not permitted to refund any VAT......

    "VAT refunds on exports

    Apple are not permitted to refund any VAT charged on UK purchases due to local legislation restrictions. The Apple Store (UK) is not a part of the Retail Export Scheme, as this scheme does not apply to Internet Sales."

    http://store.apple.com/uk/help/payments?mco=MTE2NDE

  29. Edward Noad
    Grenade

    @lolcat

    Oh, I'm sorry, were *us Brits* bashing the iPhone? I got the [impression] when I read it [through] that the article was about how Apple was [contradicting] itself by selling the iPhone on it's business [credentials] but then banning it's use as such in the T's and C's. It would certainly seem that Apple and it's carrier partners are all [encouraging] it.

    So what happens when you contact Apple's support with some [esoteric] query, [mentioning] how it's messing up your business and you need a prompt response, only to have your iPhone quietly delete all your apps and data behind your back at Apple's [behest]?

    I doubt they'd do that, but the mere [possibility] would certainly [dissuade] further [expansion] by the iPhone into the business [environment]. I'd say that was worth writing an article about. I wouldn't justify [describing] it as "a new low" merely because it was based on user comments and researched by the [journalist] rather than presented on TV by an [anchor-person] and explained in lowest-common [denominator] [lingual] terms by an expert with a [dubious] commercial [association] with [conflicting] interests.

    [] around long/complex/properly-spelled words so you know which ones to look up, I know how hard a time "you Yanks" have with the English language, as well as taking criticism without instantly jumping to some perverted kind of patriotism in defense while waving the American flag over your burning wreck of a nation.

  30. David Bagby
    Jobs Horns

    Apple won't refund US Sales taxes either

    Apple's VAT policy in iTunes / the App Store is consistent with their US Sales Tax policy.

    I work for a public university and my state government exempts our purchases from the state's sales tax.

    In the US, Apple does not charge sales tax on regular hardware/software purchases by groups that are exempt from the tax. However, they have no mechanism to allow sales tax exempt purchases through the App Store. Pointing to the T&Cs of the iTunes Store, they also refuse to provide a refund of sales tax.

    The iTunes Store and the App Store share a common set of T&Cs. I wonder if this tax question is a leftover from the beginnings of the iTunes store - after all, what music rights holder would sell a song for $0.99 for anything other than "personal, non-commercial use"? If that's the case, then it's high time for the App Store to get its own T&Cs.

  31. Andrew 19
    Big Brother

    iPhone Vertical Market?

    So does this apply only to the app store? Is it even legit (from Apple's perspective) for a software vendor to market iPhone apps directly to (business) customers, bypassing the app store?

  32. Anonymous Coward
    Paris Hilton

    @Confused

    Its fairly clear that you are confused. You state a few resons NOT to buy one and none FOR buying one yet you say that you want one?

    Let me guess: No technical background at all right? Buisniss education? office worker? and thus your buying it next week cause its cool to have one no matter how much you end up walking funny from dealing with apple.

    Paris cause she gets screwed less than a apple customer

  33. Anonymous Coward
    Stop

    This is not legal (no really, it isn't!)

    "But Apple won't provide a receipt in order to reclaim that VAT, on the grounds that iPhone applications aren't for commercial use"

    They MUST provide a VAT receipt on request, regardless of commercial use or otherwise. That is the law. At least it is in the UK.

  34. SuperTim

    @G l e n n ...Business Vat reclaim.

    If Apple charge UK VAT on an item, they are bound by law to pay that charge to UK Revenue and Customs. If one claims for a business item, then they can have that VAT returned to them by UK revenue and customs, not by Apple. All one needs is a VAT receipt from the seller, who must provide one if they charge VAT.

  35. Richard 51

    VAT for Luxuries?

    Sorry, I think your correspondent has his facts a bit twisted. VAT is not a tax on luxury goods its a tax on the value to the buyer. So joe bloggs in the street pays VAT on just about anything they buy.

    But Companies pay tax on the difference between what they buy something for and what they sell. So simple example mobile phone retailer buys the Nokia N97 for $200 from Nokia. Pays VAT to Nokia and then sells the phone to me at $300 and I pay VAT on the $300. The retailer only pays to the government the difference between the VAT on $200 and $300. The value he has "added" in his trade.

  36. Des
    Paris Hilton

    RE: @lolcat

    Couldn't have said it better myself!

    Paris, because when she uses the iPhone for business she wants it to delete all her data.

  37. Anonymous Coward
    Anonymous Coward

    Of course it's not for business.

    No Apple products are for business, they're just toys for gullible consumers.

    Why would you want an iPhone for business when you have no way of using custom applications than making them public which is useless for businesses? When you have nothing like BES?

    You may have a few MacBooks but no one in their right mind would use MacOS X server, it's not even as good as Windows server let alone Linux and Unix flavours.

    Their desktops are expensive but ultimately provide nothing more than the cheapest Dells for business use and of course other products like the iPod are clearly not business tools.

    Apple is not a company for business at all, it's effectively an expensive high tech toy company. It's products are nice to look at, fun to play about with, but if you actually want to get anything done you'd be stupid to go Apple for anything.

  38. Anonymous Coward
    Anonymous Coward

    @Richard Fletche

    A business can purchase any item and claim back the VAT - if the product is provided to an employee then the Inland Revenue will clobber him for benefit in kind, HMRC does not penalise the company for VAT... this is based on the experience of providing PCs to employees at home to use.

    So you have a point, I don't think it's up to Apple to decide and I think they *have* to provide a VAT receipt if they are charging VAT and one is demanded by the purchaser.

  39. PJI
    Alert

    No luxury.

    VAT is not a luxury tax. In the UK it is levied on all goods except (think still) food (restaurants charge because of service), books, newspapers and childrens' clothes. A business can reclaim all VAT paid in the course of business provided it is registered for VAT. Over a certain turnover (I do not know how much nowadays) the business must be registered.

    Re internet sales: living abroad, I have bought things over the internet from UK firms. They sell it to me free of VAT (I pay the Swiss VAT, 7.2%, when it comes through customs). Buying from Germany I get the same deal.

    I am fairly sure that another correspondent is right: they have to provide a full receipt with VAT number and tax if doing business in Europe, in which case one can claim it back if you had to pay it, albeit by a more tortuous route. The Apple shops in UK can print out the correct form; C&E refunded to me the VAT efficiently by direct payment into my bank account, without question when I filled in their form and attached the VAT receipt for items bought in an Apple shop this Spring. I suspect the bit about business use is some sloppy interpretation by a junior employee trying to rationalise what he or she did not understand.

    @lolcat:

    As Noel Coward said, regarding Americans and English: they have not spoken it for years. It is fun to tease new USA arrivals in Europe: just use words like "fortnight", "shall" or "w*nk" or snigger at their "fanny packs". Try speaking real English in USA and see the blank incomprehension around one. unless speaking a subset, slowly (remember all those remade-for-USA comedies as the language, culture and humour are too foreign, those retitled and even partially translated books). Anyway, you will all be speaking Spanish soon and quite possibly more Indians (from India that is) speak English, of a purer sort too.

  40. Bill Ray (Written by Reg staff)

    VAT Law and luxuries

    Several people have suggested that Apple is required by UK law to provide a VAT receipt, though as an American company operating out of Ireland it's hard to see why they would be subject to UK law. Our best advice is that the situation may be unlawful, but almost certainly isn't illegal, so we'll have to see what happens when someone challenges Apple.

    Regarding VAT being charged on only luxury goods it is indeed more accurate to say that non-luxuries (food, books, children's cloths, etc.) is exempted from VAT, though the affect is the same.

    Hope that clarifies things, and we'll keep pushing Apple for its take on the matter.

    Bill.

  41. sleepy

    Commercial purposes?

    Of course you can use an app in the performance of work. The "commercial purposes" Apple is prohibiting are direct revenue generation from the app. For example, reselling it or renting it out, or craftily hooking your iPhone (or Apple's iPhone emulator) up to offer app features as a web service.

  42. Anonymous Coward
    Anonymous Coward

    @Confused AC at 06:58 GMT

    I have a Degree in Electrical and Electronic Engineering, post graduate business qualifications and was head of Technical Architecture for a FTSE100 company.

    Decisions are not always based on rational (i.e. technical, purely logical) criteria - for example, spending £800 on a watch rather than a cheaper one for £100 or buying a BMW when a Ford Mondeo may be just as fast and reliable. Even in a business context, you might choose to purchase from a vendor because of the way they deal with you rather than from the cheapest one for the same requirements. It's down to individual preference (MBTI is a good test to see your preferences).

    Why do I still want one ? Because of the way it felt in my hand, because I found the UI intuitive, because the guy in the Apple store was very knowledgeable and helpful. Not things you'll find on a spec sheet.

  43. George Marian
    Paris Hilton

    Heh...

    "Sold as a novelty only."

  44. Field Marshal Von Krakenfart
    Unhappy

    Irish Vat Laws

    Well from my time as a contractor, my understanding of Irish VAT laws is similar to the UK, you are entitled to a VAT receipt, the determination of VAT rates and whether VAT is payable is set by the revenue commissioners, not crApple. In fact most PC retailrs will ask you if you want a VAT receipt when purchasing computers or their components.

    Have crApple descended into depths of hell with swineair, who won't refund taxes except for a reasonable administration fee".

    I'm sure they must be breaching several Irish Laws and EU directives.

    Seems like another reason to avoid crApple products.

    Just for the fun of it, Irish VAT laws consider smoked salmon a basic food stuff as there is zero VAT on smoked salmon, where as toilet paper is considered a luxury item and attracts the highest rate of VAT. Also there is no VAT on children's clothes but there is VAT on adults clothes.

  45. DaveFlash
    FAIL

    This isn't the only strange thing with these terms

    If you read through the terms a bit more you'll read the following:

    "(v) You shall be authorized to burn an audio playlist up to seven times."

    That's strange, 'cause all music is now DRM-free and can be burned unlimited times!

    and

    "(viii) You may not use Products as a musical "ringer" in connection with phone calls."

    That's even stranger, cause since iPhone OS 2.0 (or something) Apple started to offer a ringtone option on songs, whats more, any DRM-free iTunes song could already (i.e. before the ringtone option was available) be opened in iLife's GarageBand to create a ringtone that way, again, Apple placed no limitations on this method.

    only way below the (v) it states:

    "(xii) iTunes Plus Products do not contain security technology that limits your usage of such Products, and Usage Rules (iii) - (vi) do not apply to iTunes Plus Products. You may copy, store and burn iTunes Plus Products as reasonably necessary for personal, noncommercial use." [plus, this term omits to mention the "Usage Rules" (v), does that mean that even iTunes Plus song playlists still may only be burned up to 7 times?]

    And last but not least the most strange of all (in my opinion):

    "(iv) You shall be able to store Products from up to five different Accounts on certain devices, such as an iPod, iPhone and Apple TV, at a time. Additional restrictions apply to Film Rentals, as described below."

    This term seems to even encourage multiple iTunes Store accounts (meaning, from across the globe, i.e separate US, UK, German and Japanese a/c's for example) And notice it doesn't even specify whether or not those "up to five" account must be from the same store, in this case, Apple has left this term open for anyone's due interpretation.

    My regards.... To all.... .....:)

  46. Avalanche

    @Bill Ray

    As far as I know providing the buyer with a VAT statement is a requirement of European law, and any company dealing within Europe (and Apple is, even it were only based in Ireland) has to comply.

    The exact interpretation of VAT law can differ between European countries, but providing the VAT statement is especially a requirement for cross-border dealings to determine if VAT needs to be applied at the target, or if it already was applied at the source (if the VAT was already applied, it will not be applied again etc).

  47. mikkyx
    FAIL

    Not for business use?

    O RLY?

    http://www.youtube.com/watch?v=oZxpljDz4Wc

    Show me a person who needs to charge credit cards, post invoices and track shipping for personal use......

  48. Jessica Werkz

    @Edward Noad

    God you do talk a load of junk.

    From a Brit who is getting embaressed by too many British comments.

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