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Sunak scraps VAT on digital publications following Cairncross review

A so-called ‘reading tax’ which imposes VAT on digital versions of newspapers, books and magazines is to be scrapped following an announcement in today’s Budget.

In a move likely to be welcomed by the newspaper industry, chancellor Rishi Sunak announcded that digital publications will no longer be liable to VAT from 1 December.

The change was one of the measures advocated by Dame Frances Cairncross in her review into the future of journalism last year.

The government said it expected the publishing industry to pass on the benefit of the relief to consumers.

“It should benefit all who read digitally, including children from poorer backgrounds,” the text of the Budget statement read.

The move is expected to come as a major boost to digital publishers, who are facing a squeeze on advertising amid tough competition from tech giants such as Google and Facebook.

Richard Reeves, managing director of the Association of Online Publishers, said the changes were “great news for the industry”.

He said it was “hopefully representative of the government’s intent to introduce greater fairness within the digital ecosystem”.

Earlier this year News UK successfully argued that the Times’ digital edition was effectively a print newspaper as it was only updated four times a day.

However, the new measures mean the VAT break will now be applied to all digital news outlets regardless of how often their website is updated.