VAT scrapped on E-publications
- Plans to scrap VAT on e-publications fast-tracked and will come into force tomorrow
- Move will potentially slash the cost of e-books and newspapers making reading more accessible as people stay at home
- Newspapers to receive up to £35 million additional government advertising revenue as part of coronavirus communications campaign
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.
Rishi Sunak said the zero rate of VAT will now apply to all e-publications from tomorrow (May 1) - 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 UK 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 of the UK is aware of the latest government guidance and advice. The advertising partnership will be working closely with newspapers across Wales over the 3 month period.
Chancellor of the Exchequer Rishi Sunak said:
“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.”
Secretary of State for Wales Simon Hart said:
“Children and adults alike are enjoying reading while staying at home to slow the spread of the coronavirus and protect the NHS. This announcement will help increase access to thousands of publications during this difficult time.
“Up-to-date information is also vital during this emergency and our advertising campaign will provide newspapers across Wales with a welcome boost.”
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.
The move will be a boost both to readers in the form of cheaper e-books and e-newspapers, and the publishing industry who should benefit from a boost in sales.
On average publishers are reporting an increase of about a third in e-book consumption during the crisis, with some publishers reporting as much as a 50% increase. In the last seven days alone, subscriptions to TI media are up 200%, whilst Hearst’s new subscribers were up more than 100% year-on-year across the second half of March.
The £35 million extra advertising revenue will be split between local, regional and national print media, and will be a vital boost to the media industry. These plans will be constantly reviewed over the next three months to ensure the campaign is as effective as possible.
Both the e-publications measure and the increased advertising spending are UK-wide.