News UK Wins Legal Appeal On VAT For Digital Newspapers

News UK, publisher of The Times, Sunday Times, The Sun and The Sun on Sunday, has won a legal appeal on VAT zero rating on electronic editions of newspapers.

On appeal, the Upper Tribunal ruled that digital versions were “newspapers” under the meaning of the Value Added Tax Act 1994 and were therefore zero rated for VAT purposes.

The News Media Association supports UK extension of zero rating to digital as well as print publications having campaigned successfully with News Media Europe for changes to the EU regime to allow zero rating of digital publications.

In the judgment, the Upper Tribunal considered that digital versions of newspapers with the characteristics found by the FTT fulfilled “the legislative purpose of the [VAT] Act to promote literacy, the dissemination of knowledge and democratic accountability by having informed public debate.”

But, as News UK had accepted, “it was not enough to show that particular service satisfied that legislative purpose but it was also necessary to show that the service shared the essential characteristics of a ‘newspaper.’”

The Upper Tribunal upheld the FTT’s findings that the digital editions were “essentially, when the evidence was viewed in the round, the same as or very similar to the newsprint editions.”

The appeal was allowed.