25 Jan 2011
Pressure is mounting on the UK government to scrap VAT on e-books to put them on an equal footing with printed books and e-publications elsewhere.
So far 42 MPs from different political parties have signed a Commons motion put down by Glasgow Labour MP Tom Harris following the increase in the VAT rate from 17.5 per cent to 20 per cent earlier this month.
It points out that e-books in some other jurisdictions are not subject to similar taxes "and therefore enjoy a huge competitive advantage" in "a growing industry which should be supported and encouraged within the UK".
Harris said he acted after being approached by an e-publisher in Glasgow and could not see why an industry of the future had been singled out for discrimination in the UK.
He said: "I cannot see any reason for this other than revenue for the Treasury. Why you should have to pay more tax on e-books than on printed material?"
He understood that EU rules prevent member states from extending zero-rating but wanted the UK government to aim for that and meanwhile lower the rate to the UK's permitted reduced rate of five per cent.
Surely it is better to remove the zero-rating for printed matter, as this only makes VAT more complicated and encourages paper consumption. If paper books were subject to VAT it would remove the unfair advantage and would encourage people to move over to "greener" eBooks.
Posted by: Alan Rolfe 02 Mar 2011
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