When the UK’s zero rate for newspapers was originally introduced, newspapers were supplied as printed publications and no one foresaw that that they would be available on Kindles, tablets and mobile phones in future. HMRC’s position is that prior to 1 May 2020 zero-rating for books, booklets, brochures, pamphlets, leaflets, newspapers, journals and periodicals was limited to physically supplied printed goods. As opposed to e-books and e-newspapers, which are supplies of electronically delivered services - and until 30 April 2020 were therefore standard-rated.
The First Tier Tribunal (FTT) found that although there was no material difference between the content of the print and digital editions (despite some features only being available online) the zero rate applied only to goods, not electronic services.
The Upper Tribunal (UT) however overturned the FTT decision and ruled that the digital editions of the Times and other News Corp newspapers should be zero-rated. The UT concluded that the VAT Act 1994 should be interpreted in a way that maintained its relevance (the “always speaking” principle). Applying the zero rate to digital newspapers did not extend the scope of the relief (which would not be allowed under EU rules). Nor did it offend the rule that the relief should be construed strictly. This gave rise to a number of claims by other suppliers for overpaid VAT on digital editions. News Corp appealed.