Publishers Call On Chancellor To Cut Digital VAT In October Budget

The News Media Association and the Professional Publishers Association, the trade body for magazines, are calling on Phillip Hammond to apply zero rating for e-publications in the Budget later this month. 

While printed magazines, periodicals books and newspapers attract a zero-rate of VAT, digital editions are subject to the full 20 per cent standard rate.

However, earlier this month, the NMA and other trade bodies welcomed the EU’s decision to allow European Member States to apply lower VAT rates to e-publications such as electronic books, newspapers and periodicals. 

The NMA, which has campaigned for years for the special role news media plays role in society promoting literacy and keeping people informed to be acknowledged through the tax regime, is pursuing Treasury and DCMS officials about the issues.  

The News Media Association said: “The EU has recognised the significant transformation of the online news media landscape by deciding to apply  lower rates to digital publications. We welcome this development and urge the Chancellor to use the upcoming Budget to bring these measures into force here in the UK.”

PPA managing director Owen Meredith said: “For years the PPA has been calling for the Chancellor to act to end this tax anomaly which penalises digital consumers and discourages innovation and investment in the digital economy.

“Now the EU has finally acted, UK Ministers are free to modernise VAT rules and correct this injustice. In our Budget Submission we have called on the Chancellor to use his October 29 Budget to take advantage of the new rules and finally end the tax on reading.”

The EU’s decision enables Member States to apply the same VAT rate for online content as printed content, saving the news media industry millions annually. Additionally, the VAT reduction could lead to wider societal benefits through educational value, improved literacy, and cultural enrichment.

The agreement was reached at a meeting of the Economic and Financial Affairs Council. Following adoption, without further discussion, on finalisation of the text in all official languages, the directive comes into force 20 days after its publication in the Official Journal.