A report by Frontier, published today, finds that there is a strong case for introducing a zero rate of VAT for digital publications. UK readers currently pay 20% in VAT for ebooks, audiobooks, ejournals and online newspaper and magazine subscriptions, while their identical printed equivalents have long been zero rated.
Our research shows that universities, libraries, government departments and the NHS are estimated to be paying up to £50-55million a year in additional VAT because of the way that digital publications are currently taxed. Zero rating could also significantly benefit consumers through lower prices and would be especially beneficial to those on lower incomes, students and the blind and partially sighted.
The report is being released days after a key EU ruling that means for the first time the Chancellor will have the power to remove VAT on digital publications at the forthcoming Budget. Frontier prepared the report for the UK Publishers Association and Professional Publishers Association.
Stephen Lotinga, CEO of the Publishers Association, said:
“This new research shows that the consumer and economic case for making this change is compelling and the government must act now to uphold the long-standing principle that taxation will not be a barrier to reading and learning.”
Frontier regularly advises clients in publishing, media and the creative industries.
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