Books and Printed Matter

What are the VAT rules on books and printed matter? What about e-publications?

This is a freeview 'At a glance' guide to books and printed matter. 

At a glance

Background

• Group 3 of Schedule 8 to the Value Added Tax Act 1994 ('Group 3') provides for the zero-rating of books and printed matter.
  
  • This zero-rating includes, subject to exceptions: books, booklets, brochures, pamphlets, leaflets, newspapers, journals, periodicals, children’s picture books and painting books, music, maps, charts and topographical plans.
• In 2018 the Council of the European Union amended Directive 2006/112/EC to enable EU member states to apply reduced rates of VAT to electronically supplied publications. The measure is in line with the communication of the Commission of 6 May 2015 on a Digital Single Market Strategy for Europe and is in order to keep abreast of technological progress in a digital economy.

E-publications

• At Budget 2020 it was announced that from 1 December 2020 electronically delivered publications, which would otherwise fall within Group 3 and were standard-rated, would also be zero-rated.
  • This measure was brought forward to 1 May 2020 due to the Coronavirus lockdown.
  • Legislation was introduced by statutory instrument to amend Group 3.
  • This zero-rating, subject to certain exclusions, extends to e-books, e-booklets, e-brochures, e-pamphlets, e-leaflets, e-newspapers, e-journals and e-periodicals and e-magazines.
  • Exclusions include e-publications that are wholly or predominantly devoted to advertising or to audio or video content.
  • The sale of e-audio books continues to be standard-rated in UK law in line with government policy.
• Legislation was introduced in Finance Act 2011 to counter avoidance schemes entered into by some businesses that artificially split supplies so that they could benefit from the zero rates for printed matter. The new legislation ensures that businesses are not able to enter into similar schemes now that e-publications are zero-rated.
• E-publications supplied prior to 1 May 2020 were standard-rated.
  • This was confirmed by the Supreme Court in News Corp UK & Ireland v HMRC [2023] UKSC7.

Useful guides on this topic

R&C Brief 6 (2023): VAT liability of digital publications
HMRC have published 'Revenue and Customs Brief 6 (2023): VAT liability of digital publications — Supreme Court decision in News Corp and Ireland Ltd' which gives an update on the VAT treatment of supplies of digital newspapers and other digital publications before 1 May 2020. 

Supreme Court confirm e-newspapers were standard rated
In News Corp UK & Ireland v HMRC [2023] UKSC7, the Supreme Court (SC) found electronic versions of newspapers were standard rated for VAT purposes prior to 1 May 2020.

External Links

The Value Added Tax (Extension of Zero-Rating to Electronically Supplied Books etc.) (Coronavirus) Order 2020 (SI2020/459)

Policy Paper: 1 May 2020 Zero Rating e-publications

EU Council Directive 20148/1713

Zero-rating books and printed matter (HMRC VAT Notice 701/10)