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Digital versions of newspaper print editions are not “newspapers”

Revenue & Customs Commissioners v News Corp UK & Ireland LTD [2021] EWCA Civ 91

Related Member(s):
Eleni Mitrophanous QC
Related Practice Area(s):
Commercial Law, Tax Law
Court:

HMRC appealed against the Upper Tribunal’s decision that the digital versions of newspapers published by the respondent were “newspapers” within the meaning of the Value Added Tax Act 1994 Sch.8 Group 3 Item 2 and were therefore zero-rated for VAT purposes.

Directive 2006/112 aimed to harmonise VAT legislation and imposed a requirement on Member States to apply a standard rate of VAT. However, under the “standstill provision” in art.110, all Member States which operated zero rating as at 1 January 1991 were permitted to continue to do so, subject to compliance with certain conditions. In accordance with that provision, s.30 of the Act provided for the zero rating of the supply of those goods or services specified in Sch.8 of the Act. Group 3 Item 2 of Sch.8 included “newspapers”. The First-tier Tribunal found that although the digital versions of the titles which the respondent published were the equivalent of its printed editions, they were not “newspapers” within the meaning of Item 2. The UT reversed that decision and the Government subsequently announced the extension of zero rating for printed newspapers to all electronic newspaper publications with effect from 1 May 2020. However, the instant appeal related to earlier VAT periods.

HELD: Digital versions of newspaper print editions were not “newspapers” within the meaning of the Value Added Tax Act 1994 Sch.8 Group 3 Item 2 and were not therefore zero-rated for VAT purposes. The words used by Parliament led to the inference that the clear legislative intent was to include tangible or physical items only.

 

Eleni Mitrophanous QC was involved in this case.