From 1 May 2020, VAT on e-publications has been scrapped. Good news for those of us who subscribe to newspapers online or buy books to read on electronic devices.
The change will potentially slash the cost of e-books and newspapers making reading more accessible as people stay at home.
Newspapers will also benefit from up to £35 million additional government advertising revenue as part of the coronavirus communications campaign.
The Treasury announcement said:
Plans to scrap VAT on e-books and e-newspapers have been significantly fast-tracked in a boost to readers and publishers during the coronavirus outbreak, the Chancellor announced today.
The zero rate of VAT will now apply to all e-publications from 1 May 2020 - seven months ahead of schedule – potentially slashing the cost of a £12 e-book by £2 and e-newspapers subscriptions by up to £25 a year.
In support of the print newspaper industry, the government has also announced it will be spending up to £35 million on newspaper advertising over the next 3 months as part of its Covid-19 communications campaign to ensure the whole UK is aware of the latest government guidance and advice.
Chancellor of the Exchequer further commented:
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.
With the nation staying in their homes during lockdown and schools closed, millions have been relying more on e-publications to pass time, home school and read the news. The Chancellor has opted to bring the zero rating forward to make entertainment more affordable for readers who are rightly staying at home during the coronavirus crisis – and are more reliant on e-publications as a result.
The price of an e-book will now be VAT-free. The e-book of Hilary Mantel’s The Mirror and The Light could be over £2 cheaper while the average tax annual saving on a typical e-newspaper or e-magazine subscription could be £25 or £20, respectively.
Readers, who rely on large print sizes or find physical books difficult to hold, are expected to particularly benefit from digital reading being more financially accessible.