Publishing association urges chancellor to cut ‘digital reading tax’ in budget

The Professional Publishers Association has pushed for Chancellor Philip Hammond to cut VAT on digital publications in his 2018 budget, which will be revealed later this month.

Digital magazines, newspapers, book and periodicals are subject to the 20 per cent standard rate of value-added tax while printed publications enjoy zero VAT.

The push for a cut to the so-called “digital reading tax” comes two weeks after European Union finance ministers ruled that member states could bring VAT on digital publications in line with print titles.

EU law had previously blocked UK lawmakers from reducing VAT rates on electronic publications.

PPA managing director Owen Meredith (pictured) said: “For years the PPA has been calling for the Chancellor to act to end this tax anomaly which penalises digital consumers and discourages innovation and investment in the digital economy.

“Now the EU has finally acted, UK ministers are free to modernise VAT rules and correct this injustice.

“In our budget submission we have called on the Chancellor to use his 29 October budget to take advantage of the new rules and finally end the tax on reading.”

He added that monetising the growth in digital audiences was “challenging” because of the “punitive” 20 per cent VAT rate.

The Treasury has been contacted for a statement on the push for a cut to digital VAT, but has not yet responded.

In a statement following the change to EU digital VAT rules, News Media Association chairman David Dinsmore said: “Online news content faces tough competition from social media platforms and freely available news outlets.

“By harmonising the tax treatment of digital and print publications, the EU has recognised the significant digital transformation of the online news media landscape which reaches bigger audiences than ever before.

“We welcome the amendments to the directive for a fairer tax regime which will benefit consumers and provide a stimulus for more investment into quality content creation.”

The PPA is a publishing trade body that represents 260 publishing companies producing consumer, customer and business magazines.