UK government urged to act as zero-rating digital VAT becomes legal
Key legislation that has just come into force means the UK government can now apply a zero-rate of VAT to digital publications, bringing the rate into line with print publications.
The UK government is being urged to axe the reading tax after this landmark change in EU law, which previously required a VAT levy on digital publications.
Paid-for digital publications, including eBooks, audiobooks, journals and newspaper subscriptions, are currently taxed at 20%. Print publications have never had VAT applied to them because successive British governments have sought to avoid a tax on reading, which would act as a barrier to knowledge.
Almost two-thirds (63%) of people in the UK support axing VAT on paid-for digital publications, according to recent research by ComRes.
Removing the tax could put up to £210m back into the pockets of UK consumers, half of whom (53%) read paid-for digital publications.
Stephen Lotinga, Chief Executive of the Publishers Association, said:
“The UK government has long said its hands are tied by EU law on this illogical and unfair tax – not any more. France, Italy and Iceland have already committed to lowering the tax on digital, with much of Europe set to follow suit. Without quick and decisive action from the government, the UK’s digital policy will fall behind its European neighbours.
“Zero-rating digital publications is a change which will not only put money into the pocket of consumers but also benefit authors, publishers and the wider UK economy. Reading is a social good, regardless of whether we read pixels or ink. That’s why we’re calling on the government to stick to its principles of not taxing knowledge by acting urgently to axe the reading tax.”
Lord Foster of Bath, who has tabled an oral question about the tax which will be heard this week in the House of Lords, said:
“It doesn’t make sense that VAT is charged on a digital book when its print equivalent is rightly exempt. The law needs to catch up with the way people read and learn today. It is important to shine a light on this issue, particularly now the EU law which prevented zero-rating digital publications has been changed. This is important for everyone who reads or listens to digital books, especially for those where accessibility plays a part. The government needs to urgently look at this issue.”
More information about the campaign and a public petition can be found at www.axethereadingtax.org.uk.
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Notes to Editors
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ComRes interviewed 2,014 GB adults online between 17th and 19th October 2018. Data were weighted to be demographically representative of all GB adults by age, gender, region and social grade. ComRes is a member of the British Polling Council and abides by its rules.Full data tables are available on www.comresglobal.com.ComRes is an independent research consultancy specialising in corporate reputation, public policy and communications.Assessing the case for zero-rating VAT on digital publications, an independent study by Frontier Economics, was published in October 2018. The report can be accessed from the Publisher’s Association website here. It found a “strong case” for zero-rating digital publications, concluding that the move would cost the Treasury £210m in 2018/19, equivalent to 0.03% of total tax receipts. Removing VAT could also increase sales by up to 10%.
About the Publishers Association
The Publishers Association (the PA) represents book, journal, audio and digital publishers in the UK, spanning fiction and non-fiction, academic and education publishing. UK publishing has a turnover of £5.7bn, with export income accounting for 60% of revenues. Our membership includes global companies such as Elsevier, Wiley, Pearson, Penguin Random House, Hachette and the University presses, as well as many independent publishing houses. Our objective as an association is to provide our members with the influence, insight and support necessary to compete and prosper. www.publishers.org.uk| @PublishersAssoc