Digital publishers to pocket 20% tax, ask for more

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An anomaly exploited by News Corp in the UK to avoid tax on digital editions has been extended to all digital news publishers.

Trade publication Press Gazette estimates the newspaper and magazine industry will be at least £50 million (A$93 million) better off after the 20 per cent Value Added Tax was cut from digital publications.

Times and Sun publisher News UK - which successfully claimed it need not charge VAT because it sold the same one daily edition to digital as well as print subscribers - is expected to gain £15 million (A$27.8 million) a year from the decision, which "zero-rates" digital publications. News UK finally won an argument with HM Revenue and Customs that its one core edition of the Times should not attract VAT, even though it was subsequently updated.

In the end, tribunal judges decided a there was no reason to exclude digital editions that promoted "literacy, the dissemination of knowledge and democratic accountability by having informed public debate in precisely the same way as the print version".

Press Gazette says few publishers intend to pass the saving on.

The UK government will also spend £35 million (A$65 million) on advertising to support print media during the COVID-19 crisis.

The News Media Association has asked for further support for the industry, particularly the local news media sector. It urged the government to "urgently look at other initiatives such as support for public interest reporting, advertising tax reliefs for news media, and quickly progressing work to level the playing field with the tech platforms".

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