e-publications – the past, the future

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With the current events we all face a lot of what was announced in the Budget has since been delayed or superceded by emergency measures. At this point in time, one change of relevance to our industry is still due to take effect. The Chancellor has undertaken to change the law so that certain e-publications will be zero rated from 1st December 2020.

The products which are sure to become zero rated from this date are:

  • e-books
  • e-newspapers
  • e-magazines
  • academic e-journals. 

This does not mirror the full list of printed items which may be zero rated. In our industry we commonly zero rate other items such as booklets, brochures, pamphlets and leaflets.  These are not mentioned in the 2020 Budget announcements or in the Finance Bill which followed. This means that currently there are no measures to allow for a digital version of these items to be zero-rated.

The government will change the law to make e-publications zero rated. It has said it will be ‘consulting’ on how the law should be amended. It remains to be seen if this consultation will consider any other digital based printed matter. This will be become clearer over time and we will of course keep you up to date.

The Budget announcement does NOT change the past or the time leading up to 1st December 2020. 

There is an ongoing dispute between News Corp and HMRC. The thrust of News Corp’s appeal is that the current law should apply to e-newspapers as well as printed editions. If they win they will able to reclaim VAT wrongly paid to date and forward to the time the law changes on 1st December 2020. As there is a lot of tax at stake for News Corp and other publishers of e-newspapers, HMRC are almost certain to fight the case until the bitter end.

In summary some e-publications will become zero rated with effect from 1st December 2020 but up to then e-publications remain standard rated pending the outcome of the News Corp appeal.