VAT on e-books scrapped early
1 May 2020
The Chancellor announced on 30 April 2020 that plans to scrap
VAT on e-books and e-newspapers have been significantly
fast-tracked in a boost to readers and publishers during the
coronavirus outbreak.
Rishi Sunak said the zero rate of VAT will now apply to all
e-publications from 1 May 2020 - seven months ahead of schedule -
potentially slashing the cost of a £12 e-book by £2 and
e-newspapers subscriptions by up to £25 a year.
In support of the print newspaper industry, the government has
also announced it will be spending up to £35 million on newspaper
advertising over the next 3 months as part of its Covid-19
communications campaign to ensure the whole UK is aware of the
latest government guidance and advice.
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.
With the nation staying in their homes during lockdown and
schools closed, millions have been relying more on e-publications
to pass time, home school and read the news. The Chancellor has
opted to bring the zero rating forward to make entertainment more
affordable for readers who are rightly staying at home during the
coronavirus crisis - and are more reliant on e-publications as a
result."
The price of an e-book will now be VAT-free. 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.
The move is expected to be a boost both to readers in the form
of cheaper e-books and e-newspapers, and the publishing industry
who should benefit from a boost in sales.
Stephen Lotinga, CEO of the Publishers Association,
said:
"We welcome the news that the government has taken this
step to significantly fast-track their plans to scrap VAT on
e-books . This is a boost to publishers, readers and authors which
is especially important at this difficult time. We hope that it
will enable more people to easily access and benefit from the
comfort, entertainment and knowledge that books
provide."
For the full press release of 30 April 2020, see the UK Government website.
VAT remains on audiobooks: see the UK Government Guidance on Zero rate of VAT for
electronic publications.