Reading Tax scrapped seven months early

Reading Tax scrapped seven months early

VAT on digital publications will be scrapped today (Friday 1st May) after Chancellor fast-tracked the plan, saying it would help readers and publishers during the coronavirus pandemic.

Rishi Sunak first announced the policy in his March Budget, announcing the chage — dubbed the “reading tax” — would end on 1st December.

But he has now said the zero rate of VAT will be brought forward seven months, potentially cutting the cost of a £12 e-book by £2.

He said: “We want to make it as easy as possible for people across the UK to get hold of the books they want whilst they are staying at home and saving lives.

“That is why we have fast tracked plans to scrap VAT on all e-publications, which will make it cheaper for publishers to sell their books, magazines and newspapers.”

In its announcement, the Treasury cited PA figures showing publishers were seeing an increase in e-book consumption of a third on average, with some seeing a 50% increase.

The PA has long-called for VAT to be scrapped on e-books as part of its Axe the Reading Tax campaign. C.e.o. Stephen Lotinga said: “We welcome the news that the government has taken this step to significantly fast-track their plans to scrap VAT on e-books. This is a boost to publishers, readers and authors which is especially important at this difficult time. We hope that it will enable more people to easily access and benefit from the comfort, entertainment and knowledge that books provide.”

Jasper Joffe, whose e-book firm Joffe Books has seen a spike in sales since the lockdown began, described the move as “great news”.

He said: “It fixes an anomaly and is a real boost for publishers, authors, and readers. We're delighted, but unfortunately we won't be able to celebrate with our usual box of doughnuts, because everyone's working from home.”

Nicola Solomon from the Society of Authors also welcomed the move, saying she would be calling on publishers and retailer to pass on the saving.

She said: "We have long said that taxes on books are taxes on learning, and we have campaigned for many years for all formats - including digital publications - to be exempt from VAT. Bringing forward the zero-rating of VAT on ebooks to 1 May comes at a critical time for publishers, booksellers, authors and the readers who enjoy their work. We will be pressing for publishers and booksellers to pass on a 20% reduction on ebooks to readers straight away."

At indie 404 Ink, publisher Laura Jones said the announcement had come at just the right time when publishers were struggling with the coronavirus impact.

She said: “For 404 Ink this means we can now sell our e-books directly to consumers via our website, as soon as this weekend, which could generate sorely needed revenue. Like most publishers, our income has taken a huge tumble in the last couple of months due to coronavirus and this news is a very welcome slice of hope.”