News UK will take its case that its digital products should have been exempt from VAT for years in the same way as newspapers to the Supreme Court after suffering a defeat in the Court of Appeal.

The Sun and Times publisher brought the case against HMRC to argue its digital news services should have been zero-rated between September 2010 and December 2016 under the section of the VAT Act that exempts printed newspapers, periodicals and journals.

If the title wins its legal fight the UK news industry could be in line for a tax windfall worth hundreds of millions.