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Why reading is more ‘taxing’ for some

Books are zero-rated from VAT. Well, traditional printed books are.

If you wanted to read this year’s Booker prize shortlist in hardback, it would cost you approx £90 and there would be no VAT applied.   

A consumer tax of 20%, or VAT as we know it, is levied on all goods sold in the UK. There are some exceptions, however, which are zero-rated, such as children’s clothes, most food and, as mentioned, printed books.      

This is in line with the tradition that knowledge and learning should be accessible.

As Stephen Lotinga, the chief executive of the Publishers Association, explained, “It has been a long-standing principle that governments won’t seek to tax and provide a barrier to books, education and knowledge.” 

But it is not a level literary playing field.   

The zero-rating does not apply to audio books or e-books which can cost up to approx 50% more. Admittedly, while some of the extra cost of audio books is due to the recording costs and the hiring of actors, the levy plays its part in keeping prices high.     

To set this in context, the UK publishing industry generated £3.6bn in total book sales in 2018. Physical book sales accounted for £2.9bn and digital £653m.

The different tax classification discriminates against those who are blind, partially sighted and the elderly. With 2 million people in the UK classed as visually impaired, this is a significant issue. 

For people struggling to read, being able to listen to books or change the size of the font on the screen of their e-reader can have a huge impact.    

But the issue is also affecting the younger generation.The National Literacy Trust has said one in eight children from disadvantaged families do not own books. If books were available in digital formats at lower costs, it’s felt children from low income families would be more likely to access them on their phones or tablets.   

High profile authors and publishers, together with one hundred MP campaign supporters, are putting pressure on the Chancellor, Sajid Javid, to address this anomaly and bring an end to digital VAT in his Autumn Budget.

From a business perspective, the tax is also seen to be a barrier to encouraging innovation in digital formats. 

Let’s hope the story has a happy ending for all those disadvantaged readers and listeners who feel they are being unfairly penalised.

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