VAT: Electronic Publishing

Treasury written question – answered am ar 14 Mai 2014.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Tom Harris Tom Harris Llafur, Glasgow South

To ask the Chancellor of the Exchequer

(1) what assessment he has made of the effect of VAT at 20 per cent on eBooks on reading and literacy levels of young and teenage readers;

(2) what assessment he has made of the effect of standard rate VAT on eBooks on (a) the UK's creative industries, (b) progress towards achieving the Government's aim of making the UK a hub for digital innovation and (c) benefits to the education sector from digital technology;

(3) what steps he is taking to ensure that VAT on eBooks at a standard rate will not damage UK authors and publishers and the UK book sector;

(4) on what grounds he decided to introduce VAT at 20 per cent on eBooks while maintaining zero rate VAT on printed books;

(5) what assessment he has made of the effect on publishers, authors and consumers of the proposed changes to VAT on eBooks in 2015;

(6) what assessment he has made of the effect on the UK eBook market of the imposition of VAT at 20 per cent.

Photo of David Gauke David Gauke The Exchequer Secretary

The UK applies the standard rate of VAT to digital books and the zero rate of VAT to physical books.

The application of VAT in the EU, including rates and flexibilities afforded to member states in this regard, is governed by EU law. The sale of a digital book is classified as an electronic service and attracts the standard rate of VAT under EU law.

Legal advice obtained by the Government indicates there is no scope to change the VAT treatment of the sale of digital book and similar products under EU law. As such, no assessments have been made of the type referred to by the hon. Member.

From 1 January 2015, VAT legislation across the EU will change to tax the supply of broadcasting, telecoms and electronically supplied services (including e-books) at the place of consumption.

HMRC has published information on the VAT changes which includes a summary of the impacts:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/264626/7._VAT_-_place_of_supply_and_the_introduction_of_the_Mini_One-Stop_Shop.pdf

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