Case: Digital Newspapers

The Upper Tribunal has delivered a surprising rejection of HMRC’s view that digital newspapers are not zero rated (as the hard copy/print versions are) in News Corp UK & Ireland (UKUT0404).

HMRC views digital publications as being a supply of a different product as covered by group 3, schedule 8, which, it asserts, only includes the physical objects that are definable as ‘books’ or ‘newspapers’, and so on. This is partly based on the fact that the zero rate was accorded to these products at a time when the physical product alone was available. It follows that the digital product cannot have been included.

Further, HMRC argues that the EU ‘standstill’ provisions introduced in 1991, which did not permit any existing zero rates to be expanded thereafter, must be interpreted as freezing the meaning of terms in the law to the only meanings available in 1991. This cannot have included digital content for the public, the internet only becoming generally available around 1995.

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