In the Budget on March 11, Chancellor to the Exchequer Rishi Sunak MP announced that from December 1 2020 digital publications, including magazines, journals, books and newspapers will be zero-rated for VAT, in the same way as print publications.
In his statement the Chancellor said: “Our greatest export to the world is our language. Our greatest asset is the free exchange of ideas and debate. And our greatest responsibility is the education of our people.
“A world-class education will help the next generation to thrive. Nothing could be more fundamental to that than reading. And yet digital publications are subject to VAT. That can’t be right.
“So today I am abolishing the reading tax.
“From 1st December, just in time for Christmas, books, newspapers, magazines or academic journals, however they are read, will have no VAT charge whatsoever.”
The Budget red book confirmed “The government will introduce legislation to apply a zero rate of VAT to e-publications from 1 December 2020, which will make it clear that e-books, e-newspapers, e-magazines and academic e-journals are entitled to the same VAT treatment as their physical counterparts.”
Commenting on the announcement, PPA Managing Director Owen Meredith said: “We are delighted that the Chancellor has acted and brought an end to this unfair and illogical tax.
“Publishers are reaching ever bigger audiences though cross-platform distribution, with digital audiences hungry for the trusted, quality content our members publish. However, monetising those audiences in the digital landscape remains challenging, and has been further hampered by a punitive tax regime that adds a 20% VAT premium to digital content.
“Our tax system has failed to keep up with technology and recognise changing consumers habits in accessing news and information. I’m delighted the Chancellor has listened to our representations and acted to end this tax on reading. This tax cut will be good for consumers and publishers alike, it will promote innovation in paid-content models as well as investment in quality journalism.
“The PPA has been at the forefront of this long campaign as the collective voice of our members across the publishing industry. This result shows what we can achieve when we work together.”