Back in October 2018 we published a news item on the change made by the EU’s Economic and Financial Affairs Council (Ecofin) to reduce VAT on online publications, including electronic books, newspapers and periodicals which would bring them into line with print publications and digital media.
Ironically now that Britain isn’t part of the EU the 
Chancellor Rishi Sunak has finally announced the 20% tax on e-books and online newspapers, magazines and journals will be abolished from 1 December. The Budget announcement brings ebooks into line with printed publications, which are already exempt from VAT.
At the end of last year HMRC suffered a defeat in the Upper Tribunal (UT) about whether e-newspapers supplied by News Corp and Ireland Ltd (UT/2018/0065) qualified for zero-rating in the same way as printed newspapers. The court recognised the doctrine of ‘always speaking’ to recognise the development of a new presentation of a product. There was no such thing as an electronic newspaper when the zero-rate schedule was introduced in 1973, so the view of the Upper Tribunal was that legislation should reflect technological changes.
At the time HMRC announced that it would appeal against the Upper Tribunal decision to the Court of Appeal but given the Chancellor’s Budget announcement it seems unlikely that it will go ahead.
The removal of VAT on e-books and online reading materials will however not apply to audio books.
