As part of the Publishers’ Association ‘Axe the Reading Tax’ campaign, senior figures in the publishing trade have written to Chancellor Sajid Javid urging him to end the VAT charge on digital publications in the next Budget.
The letter, signed by 42 senior publishing figures, pointed out that, at the moment, there is no VAT charged on print, books, journals and magazines, but the same principle does not apply to digital versions, even though the EU lifted restrictions on lifting the charge last year.
Paid-for digital publications, including e-books, audiobooks, journals and newspaper subscriptions, are currently taxed at 20 per cent. A spokesman for the Publishers’ Association has said that this is “outdated and deeply unfair” as it disadvantages young readers and people with disabilities.
According to the letter, the ongoing inequality has significant ramifications for readers, publishers and the public purse. Moreover, the tax is an outdated, unintended, unfair tax that disproportionately impacts readers who rely on digital content for accessibility reasons, including people with disabilities and the elderly who may need audiobooks or e-readers that can be used to alter print sizes.
The letter argues that the charge could restrict children’s literacy and innovation in digital formats, and may stop the UK being “tax competitive”. It concludes by saying that reading must be accessible to everyone, whatever format they favour.
MP and chair of the education committee Robert Halfon supports the letter and has said that removing VAT on eBooks is not only essential to modernising the tax system but also the right thing to do to make sure that age, income and disability do not act as barriers to learning.
Rob Chedzoy, Tax Partner at Milsted Langdon, said: “The ‘Axe the Reading Tax’ campaign is a very interesting case, with many feeling that the rule is outdated. With the rise of digital platforms through e-books, online journals and magazines, it means that there is disparity between print and digital formats.
“For advice on matters relating to business tax, contact us today.”