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Comment by klelatti | Hacker News Reader

Just in case anyone is confused by the 'paying no taxes' bit.

Indeed Raspberry PI Ltd (formerly Raspberry PI Trading Ltd) paid no tax on its profits in 2020 (the most recent filing year) but not because its a charity - which it isn't - rather because they got tax deductions for R&D. I strongly suspect that these deductions would be available to any other firm that spent the same amount on R&D.

And of course they did pay a significant amount of VAT (sales taxes) on these boards.

In short the tax insinuation bit of this is very likely completely unjustified.

Edit: I've read the rest of the post this comment quotes from (on the IPFire Forum) - it goes on to accuse RPi of tax evasion (i.e illegality) - seemingly because they are annoyed that they don't make it easy to run their software on it. This is not an 'interesting perspective'.

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The interesting perspective i took away was how something like the raspberry pi shapes the market as a whole whether intended or not. See comment in the original discussion if you are interested.

In short, even if not through tax advantages, it is very hard to compete with a charity (or even the "free" open source developers it attracts as a results). As such it is difficult to imagine how a competing open source hardware would emerge. I found it interesting since there is no clear cut solution to this. Or even the consensus that the state is somehow bad, after all, having a raspberry is absolutely amazing. It just has consequences.

Why is it hard to compete with a charity - which by definition doesn't have access to capital in the way that a commercial firm has?

Maybe RPi just knew what their market needed and delivered it very effectively?

I noted in a previous post that the Beaglebone was was what the Pi should have been. It is open hardware, they are targetting the educational market, and has some interesting real-time coprocessors. But it is too pricey, so neither I, nor many others, bought one. It's a shame really.

> it is very hard to compete with a charity

Ignoring the split between the Raspberry Pi Charity and the Raspberry Pi For-Profit company, charities have more regulation and restrictions than for-profit companies, no? Wouldn't it be easier to compete if you didn't have to at least pretend to operate a public-good charity?

My own view why the Pi succeeded: they understood the market. They were prepared to innovate. Everyone else seemed to be a "me-too". Sure, others came out with products that were more powerful, but then they cost more, and some of the hardware wasn't properly supported. Competitors never really offered a compelling reason why we should buy their offerings.

Take the Pi 0. Before that came out, the field was open for a competitor to see a gap in the market and capitalise on it. But none did. So then the Pi 0 came out and took a slice of the pie whilst everyone was asleep.

Roll on a few years, when the tech progressed, the competition had the opportunity to produce something like a Pi 0 but cheaper or better. What did they do? Absolutely nothing. This allowed the Foundation to once again create another product: the Pi 0 2. The power of a Pi 3, at the price of a Pi 0W (near enough).

The competition is clueless, which has allowed the Foundation to knock the ball out of the pack time after time after time. Upton is Britain's answer to Jobs.

My guess is that RPi got the trade-offs broadly right (price / capabilities / software support / availability) and were serious about their education mission which gave them a strong focus. Others seem to have dabbled but not much more.

Plus Upton seems quite driven!

And of course they did pay a significant amount of VAT (sales taxes) on these boards.

End consumers pay VAT, the company doesn't.

In the UK companies pay VAT to HMRC.

Of course they pay the VAT to HMRC. They collect the VAT, since it's paid to the company when you buy something off of them - customers don't make a separate payment to the government every time they make a purchase! But the essential point is that every penny of the VAT from their sales comes direct from a customer.

Unlike income tax and employees, customers are not legally liable for VAT on goods they buy, rather companies are liable for VAT on what they sell. So it's not just a question of accounting and collection. VAT is a tax paid by the company.

Of course ultimately the costs fall on the customer as do all costs. Would you say that RPi doesn't pay for components because the customer ultimately pays for these too?

The original post said that RPi paid no tax which is without doubt factually incorrect.

That's true for income tax as well

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