Budget 2020: VAT on e-books and newspapers scrapped

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Chancellor Rishi Sunak has announced the 20% tax on e-books and online newspapers, magazines and journals will be abolished on 1 December.

But the BBC has learned that it will not apply to audiobooks, something that the Royal National Institute of Blind People had campaigned for.

A letter calling for the tax to be axed was signed by more than 600 authors and presented to Parliament in October.

Physical books and periodicals are already exempt.

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In October 2018, the EU allowed member states drop sales taxes on electronic publications.

“The government expects the publishing industry, including e-booksellers, to pass on the benefit of this relief to consumers,” the Budget states.

Publisher 404 Ink tweeted the “huge” decision would allow it to sell e-books from its website again.

Jim Waterson, media editor at the Guardian newspaper, estimated the move could benefit News UK – publisher of the Sun and Times papers – by £20m, if it kept the cost to consumers the same rather than passing on the saving to subscribers.

A 2018 report by the Publishers’ Association estimated universities, libraries, government departments and the NHS would save up to £55m a year as a result of ditching VAT on digital publications.

In response to the news, it said: “We are delighted that the government has decided to zero-rate VAT on digital books and journals in the Budget. It’s fantastic that the Chancellor has acknowledged the value of reading.

“The decision to axe the reading tax will bring an end to the illogical and unfair tax on those who need or prefer to read digitally and should contribute to an increase in literacy in the UK.”