Abolition of reading tax hailed

The Chancellor delivered an early Christmas present for bookworms as he announced the abolition of the so-called “reading tax”.

Rishi Sunak said VAT on digital publications, including books, newspapers, magazines and academic journals, will be scrapped from 1 December.

Announcing the news, which was met with cheers, he said: “A worldclass education will help the next generation thrive and nothing could be more fundamental to that than reading. And yet digital publications are subject to VAT. That can’t be right. There will be no VAT on historical fiction by Hilary Mantel, manuals or textbooks like Gray’s Anatomy, or indeed works of fantasy like John Mcdonnell’s Economics For The Many”.

Books and newspapers have been exempt from VAT since the introduction of the tax in 1973. In 2018, the European Union allowed its member states to remove or to apply lower VAT to electronic publications – but the UK did not follow suit.

In February, 700 writers including Stephen Fry, Fifty Shades Of Grey author EL James and crime writer Val Mcdermid called for the tax to be removed.

Jim Burberry, VAT partner in Scotland at audit, tax and consulting firm RSM, said: “This announcement brings the UK into line with many other EU member states that have announced VAT rate reductions for e-publications over the last few years after previous legislation blocking the relief was removed from the EU VAT directive. It shed new light on the ongoing litigation between HMRC and News Corp, which is claiming that UK VAT law has always permitted zero-rating for digital subscriptions for The Times and The Sunday Times.’

The Publishers Association’s Axe The Reading Tax campaign had called for the removal of the “illogical and unfair” levy.