Digital Publications and VAT – Supreme Court Decision in News Corp and Ireland Ltd Case
Printed newspapers have been zero-rated since VAT was introduced in the UK in 1973. However, digital publications had been subject to standard-rated VAT until a change in legislation on 1 May 2020 made certain e-publications, including digital newspapers zero-rated.
News Corp and Ireland Ltd had submitted a claim, stating that they had been overpaying VAT on income it received for granting access to digital versions of several of its publications. It claimed that these digital versions were zero-rated since they fell within the ordinary meaning of newspapers and that to treat them differently would breach the principle of fiscal neutrality. This is the principle which requires that supplies of similar goods and services be treated consistently for VAT purposes.
HMRC rejected the organisation’s claim, as at that time all digital publications were standard-rated, meaning that VAT had been paid correctly.
The Supreme Court decided that the defining characteristics of newspapers to which zero rates applied prior to May 2020, were news communicated through the medium of print in a physical format. Therefore the principle of fiscal neutrality did not apply, so Newscorp and Ireland Ltd’s case was dismissed.
HMRC is now contacting other organisations that have submitted claims on the same basis, to establish whether they wish to continue to pursue those claims.