Chancellor Rishi Sunak announced this measure on March 11th 2020, thus aligning digital publications with physical newspapers and magazines the by scrapping the “reading tax”. In this regard, it is stated in Budget 2020 that “(t)he government will introduce legislation to apply a zero rate of VAT to e-publications from 1 December 2020, which will make it clear that e-books, e-newspapers, e-magazines and academic e-journals are entitled to the same treatment as their physical counterparts.”
The UK joins other states such as France, Italy, Belgium and Portugal who have lowered or removed these taxes, a step made possible by legislative changes in the European Union (EU) in October 2018.
This positive news for publishers and consumers has been received favorably by Stephen Lotinga, CEO of the UK Publishers association: “We are delighted that the Government has decided to zero-rate VAT on digital books and journals in the Budget. It’s fantastic that the Chancellor has acknowledged the value of reading. The decision to axe the reading tax will bring an end to the illogical and unfair tax on those who need or prefer to read digitally and should contribute to an increase in literacy in the UK.”
While the IPA is working on updating the VAT report for 2019, an overview of VAT rates around the world in 2018 can be found here.