UK to End VAT on eBooks (But Not Audiobooks)
After a decade of lobbying bu authors and book publishers, the UK government announced this week that the Value Added Tax collected on the sale of ebooks would be reduced to zero starting on 1 December 2020.
The UK Publishers Association is overjoyed, but I see this as a glass half full.
“We are delighted that the Government has decided to zero-rate VAT on digital books and journals in the Budget," Stephen Lotinga, CEO of the Publishers Association, said in a statement. "It’s fantastic that the Chancellor has acknowledged the value of reading. The decision to axe the reading tax will bring an end to the illogical and unfair tax on those who need or prefer to read digitally and should contribute to an increase in literacy in the UK. We want to thank all the parliamentarians, organisations and individuals who have supported this campaign and helped make the case for change – we look forward to continuing the important work of making reading accessible for all.”
Under the old rules no VAT was collected on print books sold in the UK, while 20% of the price of an ebook was paid to the UK government. (Yes, the UK has the equivalent of what in the USA would be a 25% national sales tax.) Print books had a 0% VAT rate due to an elitist and archaic belief that books were unique cultural objects. At the same time, ebooks were classified as software.
While this change would appear to be good news, the RNIB reminds us that the glass is only half full. Only ebooks will be getting the zero VAT under the new rule, but audiobooks will not. Speaking in their role as advocates for the visually impaired, the RNIB has a problem with this development:
While we welcome the announcement of a VAT exemption on e-publications, we are disappointed that it appears this won’t be extended to audiobooks. Printed books, magazines and newspapers have been VAT exempt since the 1970s, because it was recognised that there shouldn’t be a tax on reading.
The change recognises the unfairness of taxing some alternative formats and will help widen access for blind and partially sighted people who use e-Readers. However, for many people living with sight loss, audiobooks are their preferred format and allow them to enjoy their favourite titles in the same way as everyone else. It’s not right that they will continue to be charged 20 per cent more for books, and we urge the Government to make sure that audiobooks are included in the exemption.
I don’t know what is more ridiculous, that the UK made this change twenty years after it was obviously a good idea, or that they still managed to screw it up.
Talk about being a day late and a dollar short.