VAT: HMRC provide guidance on digital publications

Newsletter issue - March 2020.

HMRC have published Brief 1 (2020): VAT liability of digital publications - Upper Tribunal in News Corp and Ireland Ltd, which confirms that HMRC's VAT treatment of supplies of digital newspapers and other publications has not changed.

Supplies of newspapers are zero rated under UK legislation. HMRC's policy is that the zero rate only applies to the sale of printed matter (that is, supplies of goods). Therefore, the sale of digital newspapers (which are services) has always been treated as standard rated.

In an appeal against the first-tier tribunal (FTT) decision in News Corp UK & Ireland Ltd [2018] TC 06385, the Upper-tier Tribunal (UT) recently ruled in favour of the appellant and reversed the original decision, instead concluding that a digital edition of a newspaper can be zero rated under VATA 1994, Sch. 8, Grp. 3, item 2.

The UT held that:

Required action

HMRC have been granted permission to appeal the Upper Tribunal decision to the Court of Appeal.

HMRC have confirmed that as their policy has not changed, any claims made in reliance of the decision in News Corp will be rejected.

Where an organisation considers that the decision in News Corp applies to its own supplies of digital publications it should provide HMRC with full details in writing, including:

Further information can be found in HMRC Brief 1/20.

 

 

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