ICAEW.com works better with JavaScript enabled.

Budget 2020: the Tax Faculty’s VAT highlights

11 March 2020: the Budget brought welcome news on postponed accounting together with a surprise announcement on the VAT treatment of e-publications.


VAT will become zero rated on e-publications with effect from 1 December 2020. This will make the VAT treatment of e-books, e-newspapers, e-magazines and academic e-journals the same as their physical counterparts.

This follows a recent Upper Tribunal decision in the case of News Corp UK & Ireland Limited [2019] UKUT 0404 (TCC). The case concerned the VAT liability of the supply of digital newspapers, including The Times, The Sunday Times, The Sun and The Sun on Sunday.

Supplies of digital newspapers are currently treated as standard rated electronic services. News Corp argued that its supplies of digital newspapers should attract the same VAT liability as its supplies of hard copy newspapers and therefore be zero rated.

Postponed accounting

From 1 January 2021 postponed accounting for VAT will apply to all imports of goods, including from the EU. This will provide an important cash flow boost to those VAT registered UK businesses which are integrated in international supply chains as they adapt to the UK’s position as an independent trading nation.

ICAEW’s Tax Faculty is particularly pleased to see this announcement, given that it was specifically requested in our recent Budget representation as follows:

“We believe, regardless of whatever trading arrangements the UK enters into with the EU at the end of the withdrawal period, consideration should be given to reintroducing postponed accounting for VAT incurred on imports of goods from throughout the world. We believe that postponed accounting should be reintroduced by the latest at the end of the transitional period on 31 December 2020.

As a number of EU countries use postponed accounting, we do not think that any future trading agreement should affect the UK’s ability to reintroduce postponed accounting. The benefits to business of postponed accounting would then become available for all imports into the UK.”