VAT zero rating for E-publications fast tracked – comes into force 1 May
Plans to remove VAT from e-publications from 1 December 2020 were announced in the March Budget (see our Education Update (17 March 2020) and our Budget VAT Commentary (11 March 2010) news items). But today, 30 April 2020, the Chancellor announced that the zero rate will apply to all e-publications from tomorrow, seven months earlier than previously announced, as further support for people in lockdown due to the Coronavirus.
From tomorrow, zero rating will apply to sales of e-books and e-newspapers, reducing the price of a £12 e-book by £2 according to HM Treasury (on the basis that sellers will pass on the relief in full).
Publishers and other suppliers of e-publications should look at their VAT accounting systems and make the necessary changes to product codes and tax classifications to make sure that their next VAT return recognises this change. It seems likely that their VAT returns for tax periods following this change will look a little different … output tax will be reduced but the level of input tax recovery should remain unaltered, so its possible that some suppliers will even find themselves in a net VAT refund position.
It was also announced that HM Government will spend up to £35m on newspaper advertising over the next 3 months (split between local, regional and national publications) as a further boost to the sector.
The Centurion VAT team is here to help – please contact your usual Centurion VAT team member or use firstname.lastname@example.org as all of our technical team will see that email and thus be able to respond promptly to your enquiry.
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