ICAEW.com works better with JavaScript enabled.


Budget 2020: the Tax Faculty’s VAT highlights

Published: 11 Mar 2020 Update History

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.”

The Tax Faculty

ICAEW's Tax Faculty is recognised internationally as a leading authority and source of expertise on taxation. The faculty is the voice of tax for ICAEW, responsible for all submissions to the tax authorities. Join the Faculty for expert guidance and support enabling you to provide the best advice on tax to your clients or business.

More support on tax

ICAEW's Tax Faculty provides technical guidance and practical support on tax practice and policy. You can sign up to the Tax Faculty's free enewsletter (TAXwire) which provides weekly updates on developments in tax.

Sign up for TAXwireJoin the Tax Faculty

More from the Tax Faculty

Latest news
Making tax digital image

Stay up to date with the latest developments in tax by signing up to the Tax Faculty's weekly e-newsletter

Practical guidance

Comprehensive support for Tax practitioners each month from the Tax Faculty and expert contributors.

Technical support
Tax Faculty image

Expert advice from the Tax Faculty's technical managers on all the developments in tax policy and practice.