Chancellor of the Exchequer George Osborne confirmed in his emergency budget on Tuesday that despite the Government’s need to raise extra cash from VAT newspapers would remain exempt.
‘I can also give this House a commitment that we will keep everyday essentials such as food and children’s clothing, as well as other zero-rated items like newspapers and printed books, exempt from VAT over the course of this Parliament.
‘In line with the increase in the main rate of VAT, the higher rate of insurance premium will also rise from 17.5 per cent to 20 per cent, while the standard rate will increase from 5 per cent to 6 per cent.”
In the pre-internet prosperity of 1993, a study commissioned by the Newspaper Society claimed that more than 200 local newspapers would close and 2,500 jobs be lost if the chancellor introduced VAT on newspaper prices in that year’s Budget.
Can you imagine what might happen if VAT was put on papers and magazines now? Everyone online in about a week?
(Hat tip – Newspaper Society)