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Zero-rating on e-publications

30th April 2020

Zero-rating on e-publications
This article was last updated on 21 May at 14:16.

In his first Budget in March the Chancellor announced that he was planning on extending the zero-rate which applies to printed matter to digital publications. This was originally going to be introduced with effect from 1 December 2020 with the relevant legislation being introduced in an Autumn fiscal event.

It was announced on 30 April that the zero-rating of digital publications would be brought forward to take effect from 1 May. The Treasury announcement said that the reason for this was COVID-19 with people staying at home being more reliant on digital publications. The announcement said that it was hoped that the measure would make such publications cheaper with publishers passing on the £2 VAT on say a £12 e-book as a saving to their customer instead of paying it over as VAT to HMRC prior to the change.

But, there is nothing to prevent publishers from maintaining their price at £12 and simply keeping the additional £2 which would previously have gone as VAT to the Treasury, and as most retailers will have sold such products on a VAT inclusive basis it seems unlikely that costs will reduce especially in the midst of a recession.     

If you should have any questions, please contact Phil Salmon, VAT Partner, or your usual haysmacintyre contact.