E-books are currently taxed in the UK at the standard rate of 20 per cent, as EU rules have only allowed a reduced rate, zero in the UK, to apply to printed publications.
After the recent EU vote individual countries will be allowed more flexibility to align the VAT rate of e-books to the rate applicable to printed publications.
Alan Peace, VAT partner at Blick Rothenberg, said: “The newspaper and book industry, not to mention Kindle and other suppliers of e-books, will be waiting with baited breath to learn what the UK Government decides to do on this issue.”
He added: “There are a number of possible scenarios; to reduce the VAT on e-books to zero, reduce the VAT on e-books to 5 per cent but at the same time increase the VAT on printed books to 5%, or simply leave the rate for e-books at 20 per cent.”
