Plans to scrap VAT on e-books and e-newspapers have been significantly fast-tracked in a boost to readers and publishers during the Coronavirus outbreak, the Chancellor announced today. This was a welcome change announced at the recent budget to level the playing field for reading material however it is consumed.
Rishi Sunak said the zero rate of VAT will now apply to all e-publications from tomorrow (1 May 2020) – seven months ahead of schedule – potentially slashing the cost of a £12 e-book by £2 and e-newspapers subscriptions by up to £25 a year.
Chancellor of the Exchequer Rishi Sunak said:
“We want to make it as easy as possible for people across the UK to get hold of the books they want whilst they are staying at home and saving lives.
That is why we have fast tracked plans to scrap VAT on all e-publications, which will make it cheaper for publishers to sell their books, magazines and newspapers.
With the nation staying in their homes during lockdown and schools closed, millions have been relying more on e-publications to pass time, home school and read the news. The Chancellor has opted to bring the zero rating forward to make entertainment more affordable for readers who are rightly staying at home during the Coronavirus crisis – and are more reliant on e-publications as a result.
The price of an e-book will now be VAT-free. The e-book of Hilary Mantel’s The Mirror and The Light could be over £2 cheaper while the average tax annual saving on a typical e-newspaper or e-magazine subscription could be £25 or £20 respectively.
The move will be a boost both to readers in the form of cheaper e-books and e-newspapers, and the publishing industry who should benefit from a boost in sales.
On average publishers are reporting an increase of about a third in e-book consumption during the crisis, with some publishers reporting as much as a 50% increase. In the last seven days alone, subscriptions to TI media are up 200%, whilst Hearst’s new subscribers were up more than 100% year-on-year across the second half of March.”
Rob Case is Partner and Head of Tax, with a specialism in VAT – if you have any questions or concerns contact Rob or his team on firstname.lastname@example.org or 01242 776000 to request a call back.