The Society of Editors has welcomed news that the government is to scrap VAT on e-newspapers from tomorrow.
Plans to scrap VAT on e-books and e-newspapers have been significantly fast-tracked in a boost to readers and publishers during the coronavirus outbreak, the Chancellor announced today (April 30, 2020).
The issue has been one of the main requests from the newspaper industry as it struggles to cope with the Covid-19 crisis.
Rishi Sunak said the zero rate of VAT will now apply to all e-publications from tomorrow (May 1) – seven months ahead of schedule – potentially slashing the cost of a £12 e-book by £2 and e-newspapers subscriptions by up to £25 a year.
Last week the government has announced it was creating a partnership with regional and national newspapers by supporting with advertising. That figure has now been confirmed at up-to £35m for the next 3 months as part of its Covid-19 communications campaign to ensure the whole UK is aware of the latest government guidance and advice.
Chancellor of the Exchequer Rishi Sunak said today: “We want to make it as easy as possible for people across the UK to get hold of the books they want whilst they are staying at home and saving lives.
“That is why we have fast tracked plans to scrap VAT on all e-publications, which will make it cheaper for publishers to sell their books, magazines and newspapers.”
With the nation staying in their homes during lockdown and schools closed, millions have been relying more on e-publications to pass time, home school and read the news. The Chancellor has opted to bring the zero rating forward to make entertainment more affordable for readers who are rightly staying at home during the coronavirus crisis – and are more reliant on e-publications as a result.
The price of an e-book will now be VAT-free. The e-book of Hilary Mantel’s The Mirror and The Light could be over £2 cheaper while the average tax annual saving on a typical e-newspaper or e-magazine subscription could be £25 or £20 respectively.
The move will be a boost both to readers in the form of cheaper e-books and e-newspapers, and the publishing industry who should benefit from a boost in sales.
On average publishers are reporting an increase of about a third in e-book consumption during the crisis, with some publishers reporting as much as a 50% increase. In the last seven days alone, subscriptions to TI media are up 200%, whilst Hearst’s new subscribers were up more than 100% year-on-year across the second half of March.
The £35 million extra advertising revenue will be split between local, regional and national print media, and will be a vital boost to the media industry. These plans will be constantly reviewed over the next three months to ensure the campaign is as effective as possible.
Both the e-publications measure and the increased advertising spending are UK-wide.
Ian Murray, executive editor of the Society of Editors said this was tremendous news.
“A great success for those who have been urging the government o take this step to support the newspaper industry,” commented Murray.