This is a freeview 'At a glance' guide to VAT on books and printed matter. 

Background

  • Group 3 of Schedule 8 to the Value Added Tax Act 1994 ('Group 3') provides for the zero-rating of books and printed matter.
    • This zero-rating includes (subject to exceptions): books, booklets, brochures, pamphlets, leaflets, newspapers, journals, periodicals, children’s picture books and painting books, music, maps, charts and topographical plans.
  • In 2018 the Council of the European Union amended Directive 2006/112/EC to enable EU member states to apply reduced rates of VAT to electronically supplied publications. The measure is in line with the communication of the Commission of 6 May 2015 on a Digital Single Market Strategy for Europe and is in order to keep abreast of technological progress in a digital economy.

E-publications

  • At Budget 2020 it was announced that from 1 December 2020 electronically delivered publications, which would otherwise fall within Group 3 would also be zero-rated.
    • This measure was brought forward to 1 May 2020 due to the Coronavirus lockdown.
    • Legislation was introduced by statutory instrument to amend Group 3.
    • This zero-rating, subject to certain exclusions, extends to e-books, e-booklets, e-brochures, e-pamphlets, e-leaflets, e-newspapers, e-journals and e-periodicals and e-magazines.
    • Exclusions include e-publications that are wholly or predominantly devoted to advertising or to audio or video content.
    • The sale of e-audio books continues to be standard rated in UK law in line with government policy.
  • Legislation was introduced in the Finance Act 2011 to counter avoidance schemes entered into by some businesses that artificially split supplies so that they could benefit from the zero rates for printed matter. The new legislation will ensure that businesses will not be able to enter into similar schemes when e-publications become zero-rated.
  • E-publications supplied prior to 1 May 2020 remain standard rated.

Useful guides on this topic

R & C Brief 3 (2021): VAT liability of digital publications update
Revenue & Customs Brief 3 (2021): 'VAT liability of digital publications – update on litigation in News Corp and Ireland Ltd' provides an update on the VAT treatment of supplies of digital newspapers and other digital publications prior to 1 May 2020.

News Corp e-newspapers were standard rated for VAT
In HMRC v News Corp UK & Ireland Limited [2021] EWCA Civ 91, the Court of Appeal reversed the decision made by the Upper Tribunal (UT), finding that electronic versions of newspapers should be standard rated for VAT.

External Links

The Value Added Tax (Extension of Zero-Rating to Electronically Supplied Books etc.) (Coronavirus) Order 2020 (SI2020/459)

1 May 2020 Zero Rating e-publications

EU Council Directive 20148/1713

Zero-rating books and printed matter (HMRC VAT Notice 701/10)


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