VAT : zero-rating e-publications

In the 2020 Budget the Government stated that it would introduce legislation to apply a zero rate of VAT to e-publications from 1 December 2020, but subsequently announced the zero rate would apply from 1 May.

Books, newspapers and magazines are one of a small number of goods and services that are charged VAT at a zero rate, and have been so since the introduction of the tax in 1973. By contrast electronic publications are subject to VAT at the standard rate, which is currently 20%. In his 2020 Budget speech the Chancellor Rishi Sunak announced that “from 1 December … books, newspapers, magazines or academic journals, however they are read, will have no VAT charge whatsoever.”[1] At the time it was estimated that the cost of extending zero-rating would be £175m in its first full year.[2] Initially the Government planned to consult on the details of the legislation ahead of its implementation,[3] but on 30 April announced that the zero rate would come in from 1 May 2020, “in a boost to readers and publishers during the coronavirus outbreak.”[4]

Notes : 

[1]    HC Deb 11 March 2020 c290

[2]    Budget 2020, HC 121, March 2020 p66 (Table 2.1 – item 15)

[3]    HM Treasury, Overview of Tax Legislation & Rates, March 2020 para 2.21

[4]    HM Treasury press notice, VAT scrapped on E-publications, 30 April 2020. Provision to this effect has been made by Order: SI 2020/459.