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VAT : zero-rating e-publications

Books, newspapers and magazines are one of a number of goods and services that are charged VAT at a zero rate, and have been so since the introduction of the tax in 1973. In the past electronic publications have not been included in the scope of the zero rate, and have been liable to VAT at the standard rate, which is currently 20%.

In his Spring 2020 Budget statement the then Chancellor Rishi Sunak announced that from 1 December 2020 “books, newspapers, magazines or academic journals, however they are read, will have no VAT charge whatsoever.” At the time it was estimated that the cost of extending zero-rating would be £175 million in its first full year (PDF).

Initially the government anticipated consulting on the details of the legislation ahead of its implementation. However, a few weeks after the Spring 2020 Budget the government announced that the zero rate would come in from 1 May 2020, “in a boost to readers and publishers during the coronavirus outbreak.” Provision to this effect was made by secondary legislation (SI 2020/459).

HM Revenue & Customs have published updated guidance on the scope of the zero rate following this change in the law (VAT Notice 701/10).