Publishers have today called for the UK government to use new powers that would allow VAT to be removed on ebooks, audio books and online newspaper and magazine subscriptions in the UK.
At the Economic and Financial Affairs Council meeting in Brussels today a longstanding proposal was approved that would allow all member states in the EU to reduce VAT on epublications (digital versions of books, journals, magazines and newspapers). In the UK this would mean a 20% reduction in the tax currently applied to digital publications, which is not applied to print publications.
Stephen Lotinga, CEO of the Publishers Association, said: “The government must act now to remove this unfair and illogical tax on ebooks, magazine and newspaper online subscriptions.
“It makes no sense in the modern world that readers are being penalised with an additional 20% tax for choosing to embrace digital. We should not be taxing reading and learning.
“We are leaving the EU but today’s decision from the ECOFIN committee removes a major obstacle for the UK Chancellor, who should now do away with this tax at the earliest opportunity – namely the Budget on October 29.
“The government’s preoccupation with Brexit should not delay him – if the UK does not act quickly it risks the UK digital policy falling behind its European competitors.
“This act would show the world that the UK is really serious about building a forward-thinking digital economy.”
Notes to Editors
At themeeting in Brussels today a proposal was approved which would allow all member states in the EU to reduce VAT on epublications (digital versions of books, journals, magazines and newspapers).
The Publishers Association wrote to the Rt Hon Philip Hammond MP, Chancellor of the Exchequer, ahead of the meeting to reiterate support for this measure and to urge the UK Government to ensure this proposal is adopted without delay.
UK readers pay 20% more for ebooks, audiobooks, journals, magazines and newspapers than they do for their identical, printed equivalents.
The discrimination between print and digital versions runs counter to the UK government’s position for more than 40 years that books and learning materials should not be taxed. If the ban is lifted, the UK government would then have the power to zero-rate epublications in line with the zero-rate applied to print equivalents.
Not only is the current discrepancy illogical, it is also discriminatory as it hits vulnerable groups hardest. These include the blind or visually impaired, who listen to audiobooks; students, who pay more to read academic journals; and young people from disadvantaged households, for whom ebooks are increasingly the first or only kind of book they have access to in the home.
According to the National Literacy Trust, 80% of children read ebooks, whereas only 60% read books in print. Statistics from Nielsen show that one third of ebook readers are low earners (under £24,000 per annum), one in 5 are aged 65+ and ebook readers are also predominantly female (64%). Taxing reading and learning for all these groups is illogical and unfair.