Revenue to appeal News Corp decision

HMRC has been granted permission to appeal the Upper Tribunal decision in News Corp UK and Ireland Ltd to the Court of Appeal. In the meantime, in a businesss brief, the department has confirmed that the VAT treatment of supplies of digital newspapers and other digital publications remains the same as before. 

HMRC also explains how organisations can submit claims for overpaid VAT and protect their position if they want to. However, given that HMRC’s policy has not changed, any claims made in reliance of the decision in News Corp will be rejected. But organisations that believe the decision applies to their own supplies of digital publications should contact HMRC.

Supplies of newspapers are zero rated under VATA 1994, Sch 8 gp 3 item 2. HMRC’s policy is that the zero rate applies only to the sale of printed matter – supplies of goods. Therefore, the sale of digital newspapers, which are services, has always been treated as standard rated.

The Upper Tribunal ruled however that group 3 could include services, such as digital publications.