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Spring Budget 2020: VAT on e-publications

From 1 May 2020, the zero rate of VAT will be applied to e-publications. Legislation will make clear that e-books, e-newspapers, e-magazines and academic e-journals are entitled to the same VAT treatment as their physical counterparts. 

Last updated: 30 April 2020

In the UK, printed books, newspapers, journals and magazines (or ‘periodicals’) are zero-rated for VAT. In contrast, digital versions of these publications are currently subject to standard-rate VAT of 20%. 

The changes were originally intended to take effect from 1 December 2020. However, following the outbreak of the coronavirus (COVID-19) pandemic the date has been brought forward to 1 May 2020.

This is welcome news for publishers of e-books e-magazines academic e-journals and e-musical scores, who have lobbied for this for some time. It is also good news for charities, membership organisations and other bodies that supply e newsletters to their members and currently account for standard rated VAT on the supply.

The rate cut is likely to be passed on to consumers of e books due to price competition between publishers, self-publishers and different retailers in the digital market. Academic institutions, libraries, government departments and the NHS will also benefit if the rate cut is passed on for other e-publications. 

E-publications are a hot topic in UK VAT since the case taken by News Corp UK & Ireland Ltd. in which the Upper Tribunal found that e-newspapers should always have been zero-rated like their printed counterparts. 

What should you do?

Suppliers of e-publications will be able to zero rate sales to UK customers from 1 May 2020, but supplies to EU consumers are liable to VAT in the customer’s country. Most EU countries apply lower rate VAT to e-publications. Until 31 December 2020 when the UK leaves the EU VAT regime, UK suppliers can use the UK VAT MOSS to account for EU VAT, but after this they will have to use the VAT MOSS system of another EU country. 

Buyers of e-publications who cannot deduct VAT will benefit from a saving if the rate cut is passed on. Businesses in this position should also consider making a claim for UK VAT charged to them prior to the change, based on the News Corp case. 

Non-profit membership organisations which supply e-publications as part of their membership fees may be able to reduce the VAT they charge. 

Read more on the Budget here.

About the author

Linda Skilbeck

+44 (0)20 8037 3114
skilbeckl@buzzacott.co.uk
LinkedIn

Last updated: 30 April 2020

In the UK, printed books, newspapers, journals and magazines (or ‘periodicals’) are zero-rated for VAT. In contrast, digital versions of these publications are currently subject to standard-rate VAT of 20%. 

The changes were originally intended to take effect from 1 December 2020. However, following the outbreak of the coronavirus (COVID-19) pandemic the date has been brought forward to 1 May 2020.

This is welcome news for publishers of e-books e-magazines academic e-journals and e-musical scores, who have lobbied for this for some time. It is also good news for charities, membership organisations and other bodies that supply e newsletters to their members and currently account for standard rated VAT on the supply.

The rate cut is likely to be passed on to consumers of e books due to price competition between publishers, self-publishers and different retailers in the digital market. Academic institutions, libraries, government departments and the NHS will also benefit if the rate cut is passed on for other e-publications. 

E-publications are a hot topic in UK VAT since the case taken by News Corp UK & Ireland Ltd. in which the Upper Tribunal found that e-newspapers should always have been zero-rated like their printed counterparts. 

What should you do?

Suppliers of e-publications will be able to zero rate sales to UK customers from 1 May 2020, but supplies to EU consumers are liable to VAT in the customer’s country. Most EU countries apply lower rate VAT to e-publications. Until 31 December 2020 when the UK leaves the EU VAT regime, UK suppliers can use the UK VAT MOSS to account for EU VAT, but after this they will have to use the VAT MOSS system of another EU country. 

Buyers of e-publications who cannot deduct VAT will benefit from a saving if the rate cut is passed on. Businesses in this position should also consider making a claim for UK VAT charged to them prior to the change, based on the News Corp case. 

Non-profit membership organisations which supply e-publications as part of their membership fees may be able to reduce the VAT they charge. 

Read more on the Budget here.

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