UK: VAT treatment of digital newspapers (Upper Tribunal decision)

UK: VAT treatment of digital newspapers

The UK Upper Tribunal decided that digital newspapers could be zero-rated for value added tax (VAT) purposes.


Related content

The case is: News Corp UK and Ireland Ltd v Revenue and Customs: [2019] UKUT 404 (TCC)


At issue was the VAT treatment of digital newspapers.

EU Directive rules historically provided that e-services may not be subject to a reduced rate of VAT; however, this rule was changed in December 2018 to permit a reduced rate for e-books and newspapers, etc. HM Revenue & Customs (HMRC) argued that this change to the EU Directive therefore meant that any reduced rate (including the zero rate) could not legally apply to these e-supplies before the date of that change. Under the “standstill provision” of the EU Principle Vat Directive (PVD), the UK was not permitted to extend the scope of any zero-rate reliefs beyond what applied in 1991.

The First Tier Tribunal found for HMRC. The taxpayer appealed, and on appeal, the relevant issues asserted by the taxpayer were:

  • Whether the digital issues were “newspapers” within the meaning of Schedule 8 Group 3 Item 2 of the Value Added Tax Act 1994 (VATA); and if not 
  • Whether fiscal neutrality nonetheless required that they be zero-rated

HMRC raised two additional issues:

  • Whether the lower tribunal’s finding that digital editions were similar to printed versions was one which no reasonable tribunal could have reached; and
  • Whether the lower tribunal’s decision was supported on the grounds that the taxpayer’s case was inconsistent with the PVD (standstill provisions and prohibition on taxing e-services at the reduced rate)

The Upper Tribunal addressed these contentions and concluded that digital newspapers could be zero-rated.

Read a January 2020 report prepared by the KPMG member firm in the UK

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us


Want to do business with KPMG?


loading image Request for proposal