Fiona Mactaggart
Main Page: Fiona Mactaggart (Labour - Slough)Department Debates - View all Fiona Mactaggart's debates with the HM Treasury
VAT on e-books
Fiona Mactaggart Excerpts(10 years, 4 months ago)
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Andrea Leadsom
Yes, I accept the hon. Gentleman’s point, and I will come on to it if he will bear with me.
EU VAT law allows member states to implement reduced rates of VAT of no less than 5% for certain goods and services, listed in annexe III of the VAT directive, at the discretion of member states. One of those reliefs relates to the supply of books on all physical means of support, newspapers and periodicals, other than material wholly or predominantly devoted to advertising. Although that may sound like it includes e-books, article 98(2) of the VAT directive specifically excludes electronically supplied services from the reduced rates in annexe III. That means that the UK charges the standard rate of VAT, 20%, on e-books and the zero rate of VAT on physical books.
As hon. Members will be aware, the UK’s e-books market is a growing one. Therefore, it is not clear that it is in need of a stimulus in the form of a reduced VAT rate. Between 2011 and 2012, e-book sales in the UK increased from £138 million to £261 million, so at a time when the Government are working to tackle the economy’s problems head-on and deliver a recovery that works for all, it is not clear that we should offer fiscal support for such a rapidly expanding industry.
Fiona Mactaggart (Slough) (Lab)
How many e-books are currently subject to UK rates of VAT and how many are subject to, for example, Luxembourg rates?
Andrea Leadsom
The hon. Lady will forgive me—I do not have those specific breakdowns to hand, but I will happily write to her on that point. I apologise for that.