← back to all news PPA calls on Chancellor to cut digital VAT in October Budget Posted on Wednesday 17th October 2018   |   0 comments

The PPA (Professional Publishers Association) has this week called on Chancellor Phillip Hammond to cut the digital reading tax in his Budget later this month.

While printed magazines, periodicals books and newspapers attract a zero-rate of VAT, digital editions are hit by the full 20% standard rate.

Until recently, the UK has been prohibited from extending the zero-rate to digital editions by EU law – which has handcuffed policy makers. However, on October 2, EU Finance Ministers adopted a Council Directive amending VAT rules regarding rates of value added tax applied to books, newspapers and periodicals and granting Member States the freedom to align reduced rates for print and digital publications.

PPA managing director, Owen Meredith commented: “For years the PPA has been calling for the Chancellor to act to end this tax anomaly which penalises digital consumers and discourages innovation and investment in the digital economy. Now the EU has finally acted, UK Ministers are free to modernise VAT rules and correct this injustice. In our Budget Submission we have called on the Chancellor to use his Ocotber 29 Budget to take advantage of the new rules and finally end the tax on reading.”

Since the introduction of Value Added Tax in 1973, magazines, periodicals, newspapers and books have been subject to a zero rate, recognising the value of reading and journalism to civic society; this ensures VAT does not act as a disincentive to reading.

Meredith added: “Publishers are reaching larger audiences than ever with cross-platform distribution, and growing digital audiences hungry for trusted, quality content. However, monetising those audiences in the digital landscape remains challenging, and this is further hampered by a punitive tax regime that adds a price premium of 20% VAT to digital content. Now is the time for the Chancellor to act”

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