VAT is scrapped for digital publications
In 2018 the EU council introduced measures to enable EU member states to apply reduced rates of VAT to electronically supplied publications. This is in line with the Digital Single Market Strategy for Europe to keep abreast of the technological progress in a digital economy. The ultimate aim being that standard rated VAT is scrapped for digital publications.
Whilst several EU member states including France and Italy announced that they would lower their rates previously the UK did not.
Previously books, newspapers and periodicals were zero rated for VAT but electronically supplied publications were standard rated. However at Budget 2020 it was announced that from 1 December 2020 a zero rate of VAT would apply to e-publications. This was to ensure that e-books, e-newspapers, e-magazines and academic e-journals have parity with the VAT treatment of their physical equivalents.
However as a result of the coronavirus pandemic, and the fact that more and more people are staying at home currently, the Chancellor has fast tracked this legislation
The Chancellor 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'
The Chancellor has stated that said the zero rate of VAT will now apply to all e-publications from 1 May 2020 - seven months ahead of schedule. This potentially reduces the cost of a £12 e-book by £2 and e-newspapers subscriptions by up to £25 a year. The author Hilary Mantel also appears to have obtained some free publicity off the back of this announcement.
Therefore if you're an online business selling digital publications (like ourselves in fact!) you may want to review matters prior to filing your next VAT return. You may also want to look at one of our previous posts here.
For more useful information, check out our Ebooks here.
And if you'd like to know how we can help you with all of this, or with anything else, feel free to give us a call on 01202 048696 or email us at email@example.com.