Revenue and Customs Brief 1 (2020) - VAT liability of digital publications - Upper Tribunal
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Published 19 February 2020
Purpose of this brief
This brief confirms that HMRC’s VAT treatment of supplies of
digital newspapers and other digital publications has not changed
following the Upper Tribunal decision in News Corp UK and Ireland Ltd
(UT/2018/0065) (‘News Corp’). It also explains how
organisations can submit claims for overpaid VAT and protect their
position if they want to.
Who needs to read this
Organisations that make supplies of digital publications and their
Supplies of newspapers are zero rated under UK legislation (the
relevant provision is Item 2 of Group 3 of Schedule 8 to the Value
Added Tax Act 1994). This legislation has been in place since VAT was
introduced into the UK in 1973.
HMRC’s policy is that the zero rate only applies to the sale
of printed matter (that is, supplies of goods). Therefore, the sale of
digital newspapers (which are services) has always been treated as
Upper Tribunal decision
The First-tier Tribunal ruled in favour of HMRC. However, the Upper
Tribunal upheld News Corp’s appeal and held that:
- group 3 of Schedule 8 is not limited to goods and can include
services (such as digital publications)
- the News Corp digital newspapers were essentially the same or at
least very similar to the corresponding printed newspapers, fulfilling
the same legislative purpose, and falling within the same category of
items (or ‘genus of facts’) that UK legislation has always
- the domestic legal principle known as the ‘always
speaking’ doctrine is engaged (essentially, that legislation in
certain circumstances should reflect and keep up to date with
- the supply of the digital newspapers in dispute fell to be zero
rated within Item 2 (notwithstanding that they did not exist when the
zero rates were introduced)
HMRC policy in
relation to digital publications
There have been no changes in HMRC’s policy, which continues
to be that supplies of digital publications are standard rated. HMRC
has been granted permission to appeal the Upper Tribunal decision to
the Court of Appeal.
of claims made for supplies of digital publications
As HMRC’s policy has not changed, any claims made in reliance
of the decision in News Corp will be rejected.
This approach will help to keep the handling of claims as simple as
possible for both parties, minimising the time and resources spent on
administering claims whilst protecting the revenue.
Where an organisation considers that the decision in News Corp
applies to its own supplies of digital publications it should provide
HMRC with full details in writing, including:
- a full description of the supplies for which the claim is being
made and which item of Group 3 of Schedule 8 the supplies fall
- clear reasons why it is considered that the claim should be
treated in the same way as the supplies in the News Corp Upper Tribunal
- a breakdown of the amounts of overpaid VAT being claimed by
prescribed accounting period and the method by which they have been
A claimant must be able to give, on request, copies of documentation
used in the calculation of a claim. If insufficient information is
given in support of a claim it will be rejected and the organisation
will need to resubmit its claim with the requisite information.
As HMRC’s policy continues to be that supplies of digital
publications are standard rated HMRC will issue a decision to reject
the claim. In order to protect its right to claim overpaid VAT an
organisation will be at liberty to appeal HMRC’s decision.
All claims will be subject to the 4 year time limit in section 80(4)
of the Value Added Tax Act 1994. Once the litigation in News Corp has
concluded, appeals will be considered in line with normal procedures.
They may also be subject to consideration of unjust enrichment.
About the Author
© Crown Copyright 2020.
A licence is needed to reproduce this article and has been republished
for educational / informational purposes only. Article reproduced by
permission of HM Revenue & Customs.
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Article Published/Sorted/Amended on Scopulus 2020-02-20 10:54:09 in Tax Articles