Cambridge-based charity Raspberry Pi has commenced production of its highly anticipated extremely low-cost computers but blamed a lack of UK competitiveness as well as HM Revenue and Customs for its decision to manufacture in Taiwan and China.
The Cambridge-based charity, which produces computers running open source software for £16 (Model A) and £22 (Model B), is aiming to encourage a new generation of computer scientists by providing a platform which encourages students to experiment with programming.
According to Liz Upton on the Raspberry Pi website, the charity originally intended to have all its manufacturing done in the UK but found UK manufacturers were unable to meet the desired price point and production speed. “If a factory had sufficient capacity to do the work for us, they were typically quoting very high prices; we’d expected a delta between manufacture pricing between the UK and the Far East, but these build prices not only wiped out all our margin, but actually pushed us into the red. Some factories were able to offer us prices which were marginally profitable, but they were only able to produce at most a few hundred units a month.”
However, Upton said that one of the most significant barriers was due to the UK tax system. “Simply put,” she said, “if we build the Raspberry Pi in Britain, we have to pay a lot more tax. If a British company imports components, it has to pay tax on those (and most components are not made in the UK). If, however, a completed device is made abroad and imported into the UK – with all of those components soldered onto it – it does not attract any import duty at all.
“Right now, the way things stand means that a company doing its manufacturing abroad, depriving the UK economy, gets a tax break. It’s an absolutely mad way for the Inland Revenue to be running things and it’s an issue we’ve taken up with the Department for Business, Innovation and Skills.”
The first batch of 10,000 devices to be produced in China will be the slightly higher specification Model B version, which Raspberry Pi believes will be the bigger seller of the two. At present, the charity is still investigating producing the Model A version in the UK but is yet to announce any details.
