Budget 2020: Chancellor scraps VAT on digital publications
Digital publications will no longer be liable to VAT charges under new measures outlined by chancellor Rishi Sunak today.
In his inaugural Budget speech, Sunak said the so-called reading tax will be abolished from 1 December.
This means that any digital publication, including books, newspapers, magazines and academic journals, will no longer be charged VAT.
Sunak quipped that the measures would also include works of fantasy, “like John McDonnell’s Economics for the Many”.
The government said it expected the publishing industry, including e-booksellers such as Amazon, to pass on the benefit of the relief to consumers.
“It should benefit all who read digitally, including children from poorer backgrounds,” the Budget statement read.
The move will come as a major boost to digital publishers, who are facing a squeeze on advertising amid tough competition from tech giants such as Google and Facebook.
Richard Reeves, managing director of the Association of Online Publishers, said the changes were “great news for the industry”.
He said it was “hopefully representative of the government’s intent to introduce greater fairness within the digital ecosystem”.
The tax overhaul, which was recommended in the Cairncross Review into the future of journalism last year, will come as a particular boost to news publishers.
Earlier this year Ruper Murdoch’s News UK was granted a VAT windfall after successfully arguing that the Times’ digital edition was effectively a print newspaper as it was only updated four times a day.
However, the new measures mean the VAT break will now be applied to all digital news outlets regardless of how often their website is updated.