The UK government is being urged to axe the “illogical and unfair” 20% tax currently imposed on ebooks, while print books remain exempt, after European legislation cleared the way for this to happen.
The new legislation, which came into force on Tuesday, allows member states to reduce or do away with VAT on digital publications such as ebooks, audiobooks, journals and newspaper subscriptions. France, Italy and Iceland have already declared they will lower their taxes on digital publications.
Digital publications are currently taxed at 20% in the UK; printed publications have been exempt from VAT since its introduction in 1973, “on the general principle of avoiding a tax on knowledge”.
A cohort of voices from the books world, led by the Publishers Association and supported by the Society of Authors, the Professional Publishers Association, the National Literacy Trust and BookTrust, is now urging the government to “axe the reading tax” on ebooks and bring them in line with print.
“Zero-rating digital publications is a change that will not only put money into the pocket of consumers, but also benefit authors, publishers and the wider UK economy. Reading is a social good, regardless of whether we read pixels or ink. That’s why we’re calling on the government to stick to its principles of not taxing knowledge by acting urgently to axe the reading tax,” said chief executive Stephen Lotinga, who is due to discuss the issue with Treasury officials on Friday. “The UK government has long said its hands are tied by EU law on this illogical and unfair tax – not any more.”
Lord Foster of Bath, who has tabled an oral question about the tax that will be heard in the House of Lords on Thursday , told the Guardian that the government urgently needs to consider the issue. “It doesn’t make sense that VAT is charged on a digital book, when its print equivalent is rightly exempt. The law needs to catch up with the way people read and learn today,” he said.
Charlie Redmayne, CEO of HarperCollins and president of the Publishers Association (PA), said the tax was “illogical, unfair and discriminates against all kinds of readers”.
“In or out of the EU, whatever kind of Brexit is approaching, the opportunity exists to change this anomaly of the tax system and we should seize it,” he said.
National Literacy Trust director Jonathan Douglas said it “fully backs the campaign to axe the reading tax”. He said new research showed that one in five children now read books online, and that children are spending almost three times as long reading online every day than they are reading in print.
BookTrust chief executive Diana Gerald agreed, calling the tax “discriminatory” against blind and partially sighted people who use digital publications more, while Society of Authors chief executive Nicola Solomon called it “a tax on reading and a tax on knowledge”.
According to ComRes research cited by the PA, 63% of people in the UK support doing away with VAT on paid-for digital publications. An independent study for the PA by Frontier Economics claimed that the removal of the tax could put “up to £210m” back into the pockets of UK consumers.
Lotinga said he was very hopeful that the tax would be removed. “The government has supported in Europe the right for European countries to be able to do this. We have been having discussions, but up until yesterday they didn’t have the legal power to do it so they were hypothetical,” he said. “I think we’ve got an incredibly compelling case about why this should be done.”
A Treasury spokesperson said: “We think it is right for EU member states to have the flexibility to set domestic VAT rates at a level that suits their circumstances and needs. We keep all taxes under review.”