The Treasury has brought forward a cut to VAT for digital publications and pledged a further £35m in advertising spend for print media to support the industry as the coronavirus lockdown continues.
Chancellor Rishi Sunak (pictured) announced the Government would impose a zero rate of VAT on all e-publications, including newspapers and magazines, at his first Budget last month.
The change was due to come into effect from 1 December following a 12-week consultation on the draft legislation.
But the Treasury said today it has been fast-tracked and will now take effect tomorrow, seven months earlier than planned, to make online news more accessible as people stay at home during the lockdown.
Press Gazette understands the VAT saving applies to all paid-for digital news content, which includes rolling-news websites that sit behind a paywall and digital editions.
Print newspapers already benefit from a zero rate of VAT.
Culture Secretary Oliver Dowden said: “This tax relief on subscriptions to digital publications will boost our world-class publishers, save consumers money and reflects the surge in popularity of e-reading as we stay at home to protect the NHS.
“I hope to see it benefitting the news industry through increased sales of e-newspapers as they continue to provide a vital public service giving people accurate and trusted information about coronavirus.”
Sunak said the change could slash the cost of an digital news subscription by up to £25 a year and a digital magazine by £20 per year.
The Treasury’s £35m extra advertising revenue, also announced today, will be split between national, regional and local print media to get its messages on coronavirus to as wide an audience as possible.
These plans will be “constantly reviewed” over the next three months “to ensure the campaign is as effective as possible”, it said.
The Government had already said it was planning to spend more than £7m on advertising with the regional press alone by the end of June. The figure for the national press has not yet been published.
Society of Editors executive director Ian Murray said the Treasury’s double announcement was a “great success for those who have been urging the government to take this step to support the newspaper industry”.
Picture: Matt Dunham/Pool via Reuters