VAT scrapped on e-publications
It was announced as part of the Spring Budget measures that the zero rate of VAT would apply to all e-books from 1 December 2020. The date of this change has now been brought forward and came into effect on 1 May 2020. This will be a welcome boost to readers and publishers during the coronavirus outbreak.
This change will bring electronic books, magazines, newspapers and other academic journals in line with their printed equivalents which have always been free of VAT (zero-rated). This change could potentially reduce the cost of a £12 e-book by £2 and e-newspapers subscriptions by up to £25 a year. Some of the biggest online retailers in the UK have already confirmed that the standard prices of e-books will be reduced with immediate effect.
The 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.'
The government also announced plans to spend £35m on newspaper advertising over the next three months as part of its Covid-19 communications campaign. The extra advertising revenue will be split between local, regional and national print media.