It would appear that the Publishers’ Association is ignorant of the manner in which the world works. Specifically, ignorant of the manner in which value added tax is a European Union imposed tax – even though the local nation collects the revenue – and the rules upon what is taxed and how being made at that higher level of sovereignty.
Children could be less likely to take up reading as a result of an “unfair and illogical” tax on digital books, publishers have said.
The Publishers Association, a leading industry body, warned that readers were being “penalised” for choosing to read e-books, because digital editions are subject to VAT whereas traditional alternatives are not.
Stephen Lotinga, the body’s chief executive, said that the disparity “is illogical and potentially damaging for new generations of readers growing up digital.”
Publishers want Philip Hammond, the Chancellor, to remove VAT from e-books, journals, audiobooks and digital news subscriptions, as part of next week’s Budget.
The basic complaint has some merit. We humans do tend to do less of those things which cost more. E-books cost more as a result of VAT? We’ll do less buying of e-books. As an opinion, albeit an informed one, I would tend to go on to point out that the cost reductions that e-books have created in access to any book will entirely swamp this effect. That Amazon carries how many million 99 p books is going to be a bigger effect than 20% VAT on the £10 ones published by the major houses. But then this is from the Publishers’ Association, isn’t it?
However, there’s a belt and braces pair of reasons why we cannot have no VAT on e-books. The first being that under the EU digital taxation rules they’ve specified that e-books should carry VAT. So, that’s that then.
Of course, it’s possible that I – or the Treasury – have misunderstood that belt part, so now the braces. One of the rules is that anything which has ever had VAT applied to it cannot then be downgraded to zero rated or exempt. We can move it to a 5% VAT band, but that’s the best we can do. Thus the reason why tampons are still lifting that VAT burden. Simply because Brussels insists that British women should bleed expensively.
That is, the demand being made isn’t possible under the current dispensation. The Chancellor doesn’t have the power to zero rate, or exempt, e-books from VAT. We’ve got to leave before we can do that. March 30 next year we can do it, before we cannot. Thus we conclude that the Publishers’ Association just doesn’t understand what it’s talking about. Which, given much of what they publish, we know, right?
As a footnote, a suggestion to whoever in the Tory Party still has a nose for actual politics, rather than internecine fighting. On March 30 2019 announce that tampons will no longer carry VAT. Fanfare it, insist loudly that this is just the first of the wave of freedoms we’re going to have as a result of Brexit. Sure, it’s trivial but think politics for a moment. And do note, Osborne’s diversion of that VAT into a special fund has created a dependent community upon that revenue. Staffed with the usual lefties and feminists. Abolishing that at the same time as the taxation itself will be so satisfying, won’t it?
Actually, anyone with any nose for politics at all would have 100 announcements lined up. One a day, the 100 Day Action Plan. All perhaps trivial nonsenses, but things we can and now will do but which we couldn’t. Thus the Tories won’t do this, will they, that nose lacking….