The Publishers Association and leading members of the trade have written a letter to Sajid Javid calling for the new Chancellor of the Exchequer to end the VAT charge on digital publications in the next Budget.
The open letter, signed by 42 senior publishing figures including PRH c.e.o. Tom Weldon and David Shelley, c.e.o. of Hachette UK, alongside PA president Peter Phillips, is part of the PA’s “Axe the Reading Tax” campaign.
It points out there is currently 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%.
Stephen Lotinga, chief executive of the PA, branded the tax "outdated and deeply unfair" and added it "hits young readers and people with disabilities in the pocket. "
He added: “It’s time for this illogical tax to end, to ensure that reading and learning is accessible to everyone, including our children, older people, and those who need to read digitally due to accessibility reasons or convenience.”
The letter states: “This ongoing inequality has significant ramifications for readers, publishers and the public purse alike. It is an outdated, unintended, unfair tax that disproportionately impacts readers who rely on digital content for accessibility reasons, including people with disabilities and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 size.”
It argues the charge could restrict children’s literacy, could restrict innovation in digital formats and may stop the UK being “tax competitive”.
Asking Javid to attend a meeting with the PA, it concludes: “We have cross-party support from Members of Parliament, as well as from members of the public who have signed our petition. We hope that you too will be able to lend your support and end this inequality. Reading must be accessible to everyone, whatever format they favour.”
MP and chair of the education committee Robert Halfon said: “We should be doing everything we can to promote reading and improve literacy among young people in the UK. 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.”
The letter in full:
Dear Chancellor of the Exchequer,
We are writing to welcome you to your new role and take this opportunity to call on you to end the unfair tax on learning by zero-rating VAT on digital publications in your next Budget.
Since 1973, successive governments have rightly maintained the policy of zero-rating VAT on print books, journals, magazines and newspapers to ensure knowledge and learning are accessible. However, the current government has not applied the same principle to digital publications, even after the EU lifted its restrictions on Member States to allow them to do so last year.
This ongoing inequality has significant ramifications for readers, publishers and the public purse alike. It 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 ereaders that can be used to alter print size.
It also potentially acts as a barrier to children’s literacy, with research from the National Literacy Trust showing that young people from low-income households are more likely to read using digital formats. Publicly funded institutions such as universities, libraries, government departments and the NHS are also needlessly taxed on their access to digital content.
From a business perspective, the tax is a barrier to increased innovation in digital formats. Zero-rating VAT on digital publications would ensure that the UK remains tax-competitive as increasing numbers of countries in the EU 27 reduce VAT on these products. It would also honour the commitments made by the government to ‘make the UK the best place in the world to start and grow a digital business’ and to ‘help every British business become a digital business’. It would be sad if the UK fell behind other European nations, rather than leading the way on this issue.
We have cross-party support from Members of Parliament, as well as from members of the public who have signed our petition. We hope that you too will be able to lend your support and end this inequality. Reading must be accessible to everyone, whatever format they favour.
We would be delighted to meet with you, as representatives of the publishing industry, to discuss this issue further if you felt able to accommodate a meeting.
Peter Phillips, President of the Publishers Association and CEO, Cambridge University Press
Annie Callanan, Vice President of the Publishers Association and CEO, Taylor & Francis Group
Charlie Redmayne, Past President of the Publishers Association and CEO, HarperCollins
Simon Allen, President, McGraw-Hill, Higher Education and International
Stephen Barr, President, SAGE International
Catherine Bell, Co-MD, Scholastic UK
Rod Bristow, President, UK and Core, Pearson Education Limited
Jamie Byng, CEO, Canongate Books
Ian Chapman, CEO & Publishers, Simon & Schuster UK & International
Rod Cookson, Managing Director, IWA Publishing Ltd
Amy Flinders, Copyright Manager, Listening Books
Anthony Forbes Watson, Managing Director, Pan Macmillan
Oliver Gadsby, Chief Executive, Rowman & Littlefield International
Lynn Gaspard, Managing Director, Saqi Books
Tommi Grover, Managing Director, Channel View Publications Ltd & Multilingual Matters
Sevak Edward Gulbekian, Chief Editor, Rudolf Steiner Press
Rumana Haider, UK & Export Sales Director, Michael O’Mara Books Ltd
Louise Jordan, Publisher, Wacky Bee Books
Anthony Kinahan, Director, Dunedin Academic Press Ltd
Anne Kitson, Managing Director and Senior Vice President, CellPress and The Lancet, Elsevier
Helen Kogan, Managing Director, Kogan Page Ltd
Karen Lotz, Group MD, Walker Books
Tricia Macmillan, Managing Director, MMS Publishing
Alexey Manichenko, CEO, Skylark Learning Limited
Perminder Mann, CEO, Bonnier Books UK
Nigel Newton, Founder and Chief Executive, Bloomsbury Publishing Plc
Dr Robert Parker, Chief Executive, Royal Society of Chemistry
Jonathan Perdoni, COO, Bonnier Books UK
Cally Poplak, Managing Director, Egmont Publishing
Nigel Portwood, Chief Executive, Oxford University Press
Jeremy Poynting, Managing Editor, Peepal Tree Press
Joanna Prior, Managing Director, Penguin General Books, Penguin Random House
Jade Robertson, International Publishing Director, Austin Macauley Publishers Ltd
Andrew Robinson, Director of Higher Education EMEA, Cengage Learning
Daniel Ropers, CEO, Springer Nature
Professor Michael Schmidt OBE FRSL, Editorial and Managing Director, Carcanet Press Ltd
Alison Shaw, Chief Executive, Bristol University Press
David Shelley, CEO, Hachette UK
Miles Stevens-Hoare, General Manager, W.F. Howes Ltd
Lis Tribe, MD, Hodder Education
Judy Verses, Executive Vice President and General Manager, Research, Wiley
Tom Weldon, CEO, Penguin Random House UK