VAT: Zero rate on e-books fast-tracked - PKF Francis Clark
skip to Main Content
Merry Christmas! Our offices will be closed from 1pm on Christmas Eve, reopening on Tuesday 4 January.

VAT: Zero rate on e-books fast-tracked

The Chancellor has today announced that the planned introduction of zero rating to e-books will be brought forward to 1 May 2020 rather than 1 December 2020 as previously announced in the Budget.   This comes after it was announced that newspapers are to receive up to £35 million additional government advertising revenue as part of coronavirus communications campaign.


In the 2020 Budget Chancellor Rishi Sunak announced that zero rating will apply to digital publications such as e-books, online newspapers, magazines and journals, replacing the 20% rate currently charged on such items unless they are wholly or predominantly devoted to advertising, audio or video content.  This brings the VAT treatment in line with the zero rating that has always applied to physical books, newspapers, journals etc. since the introduction of VAT to the UK in 1973.


News Corp and Ireland Limited VAT case

The change of VAT rate follows the December 2019 Upper Tribunal judgement which found in favour of News Corp and Ireland Limited (‘News Corp’) over HMRC. The Upper Tribunal allowed the application of the zero rate to News Corp digital newspapers on the basis that the digital newspapers were “essentially the same or at least very similar to the corresponding printed newspaper” and fall within the same category of items that have always been zero rated under UK legislation.   It should be noted that HMRC policy has remained unchanged as a result of the News Corp Upper Tribunal Judgement.  The Chancellor’s budget announcement changing the legislation regarding digital publications effectively takes this decision out of their hands.


Back To Top