R&C Brief 6 (2023): VAT liability of digital publications

HMRC have published 'Revenue and Customs Brief 6 (2023): VAT liability of digital publications — Supreme Court decision in News Corp and Ireland Ltd' which gives an update on the VAT treatment of supplies of digital newspapers and other digital publications before 1 May 2020. 

Background

• Supplies of newspapers are zero-rated under UK VAT legislation. 
• Prior to 1 May 2020, when a new Zero rate for supplies of certain e-publications was introduced, HMRC’s policy was that the zero rate for newspapers only applied to the sale of printed matter, i.e. supplies of goods.
• HMRC's position was that, before 1 May 2020, the sale of digital newspapers, which are services, was standard-rated.
  • This position was challenged in News Corp UK & Ireland v HMRC [2023] UKSC7.
• The Supreme Court in News Corp agreed with HMRC's pre-1 May 2020 policy: supplies of digital publications before 1 May 2020 were standard-rated.

Current position

• Due to the Supreme Court decision, HMRC is now in the process of writing to organisations that have submitted claims for overpaid VAT based on the earlier Upper Tribunal decision in the News Corp litigation.
  • This is to establish whether they intend to proceed with their appeals.
• This Revenue and Customs Brief replaces Revenue and Customs Brief 3 (2021).
  • It has no impact on the introduction of a new zero rate for supplies of certain digital publications, including e-newspapers, which came into effect from 1 May 2020.

Useful guides on this topic

Books and Printed Matter
What are the VAT rules on books and printed matter? What about e-publications?

Supreme Court confirm e-newspapers were standard rated
In News Corp UK & Ireland v HMRC [2023] UKSC7, the Supreme Court (SC) found electronic versions of newspapers were standard rated for VAT purposes prior to 1 May 2020.

External link

Revenue and Customs Brief 6 (2023): VAT liability of digital publications — Supreme Court decision in News Corp and Ireland Ltd