Treasury fast tracks VAT cut for e-books and digital newspapers
Plans to scrap VAT on e-books and digital newspapers have been fast tracked in an effort to support the publishing industry during the Covid-19 crisis, the chancellor said today.
In his Budget speech in March Rishi Sunak said all digital publications, including books, newspapers, magazines and academic journals, would be exempt from the tax from 1 December.
But the measures will now come into force tomorrow seven months ahead of schedule. The government hopes the move will make it easier for people to access e-books and other material during lockdown.
“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,” Sunak said in a statement.
“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.”
In addition, the government said it will spend up to £35m on newspaper advertising for its Covid-19 public health campaign over the next three months.
The additional spend, which will be split between local, regional and national papers, will come as a major boost to titles as they fight a sudden collapse in advertising revenue.
The government has previously said it expected publishers to pass on the VAT relief to consumers as they benefit from a boost in sales.
According to the Treasury’s estimates, 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.
Ian Murray, executive editor of the Society of Editors, said the decision was a “great success for those who have been urging the government to take this step to support the newspaper industry”.