Nitpicking here, I know, but the devil’s in the detail….

To make a margin of 30% the retailer must add 43% to the cost price.

43% is ‘the mark-up’ and 30% is ‘the margin’.

What has happened here is that the boundaries of definitions have been pushed a little in various directions, as far as I can make see. First, recording has been redefined to mean ‘recording from an external source’ with a side order of ‘and anyway they didn’t buy it just because it could record.’

That’s perhaps not such a big push – camcorders were for a long time treated differently, and subject to a higher rate of duty, if they were able to record from an external source, which is why the cheaper ones didn’t tend to have Firewire connections.

This is where, if you have the will to live, you need to go to the source, which is available via Europa, and see what the judgement says in case C289/09.

Reading through the rather dense prose, certain things are clear.

1. There are two customs categories involved. 8251 90 00 is the one in which the Sky Plus box found itself, with 13.9% duty. Category 8528 71 13 is for

set-top boxes which have a communication function: a microprocessor-based device incorporating a modem for gaining access to the internet, and having a function of interactive information exchange

which is to comply with a global tariff agreement.

So, the box could, potentially, be in either, but has been in the first category. The rules for classification are set down, and include the note

Unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machines adapted for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function

Much of the argument detailed in the ruling is essentially down to Sky pointing out that the main job of the box is receiving their service; the hard disk is ancillary, partly because it can’t be used as a recorder in the accepted sense, but also because even when you’re playing something back, you’re reliant upon the Sky broadcasts – it won’t work if it’s not connected to a dish.

There’s a discussion of which is the real principal function, followed by the conclusion that (the CN is the list of categories):

It follows from all those considerations that the CN must be interpreted as meaning that set-top boxes with a communication function and a hard disk drive, such as the Sky+ box, are to be classified under subheading 8528 71 13 despite the Explanatory Notes to the CN.

So, the presence of communications functionality is certainly key to this – and it hasn’t been redefined to mean simple satellite reception. But whether or not ethernet will be considered a modem for the purposes of the regulations isn’t something that was discussed in the ruling, and of course plenty of PVRs don’t have a modem anyway.

Perhaps the only people who’ll really benefit right away will be Sky (and they’ve been working on this for years).

Also, in BTVN’s coverage, PVRs are defined as being unable to record to or from external removable media like a disc or tape. So the ruling would apply to any HDD-only PVR, but not to HDD/DVD/Blu-ray combis like Panasonic’s. And what does it mean for USB storage?