UK Chancellor Rishi Sunak handed a welcome boost to authors and publishers by promising to abolish VAT on digital publications.
The chancellor plans to introduce legislation to apply a zero rate of VAT to e-publications from 1 December 2020”.
Sunak’s cut comes under the ‘Cutting the cost of living 1.174’ section of the 2020 Budget statement.
VAT on ebooks cut
This means that e-books, e-newspapers, e-magazines and academic e-journals are entitled to the same VAT treatment as their physical counterparts.
“The government expects the publishing industry, including e-booksellers, to pass on the benefit of this relief to consumers” Sunak said.
“It should benefit all who read digitally, including children from poorer backgrounds; nearly 1 in 4 pupils on free school meals read fiction digitally, compared to 1 in 6 of their peers who are not eligible for free school meals.”
This will be welcome news to authors and publishers as it cuts the price of buying ebooks, e-mags and e-newspapers.
The move follows a similar cut in VAT in 2018 for ebooks and other digital publishers in the European Union.
Audiobook tax remains
However, various media reports have suggested the cut will not extend to audio versions of books and magazines.
The Royal Institute for the Blind voiced disappointment that the government didn’t offer the tax break to those using audiobooks.
“Today’s change recognises the unfairness of taxing some alternative formats and will help widen access for blind and partially sighted people who use e-Readers”, Sarah Lambert, the RNIB’s head of social change, told the BBC:.
“However, for many people living with sight loss, audiobooks are their preferred format and allow them to enjoy their favourite titles in the same way as everyone else.
“It’s not right that they will continue to be charged 20% more for books and we urge the government to make sure that audiobooks are included in the exemption.”