Date of issue: 14th June 2010

PRINT MEDIA LIKELY TO TAKE VAT HIT WARNS CLEMENT KEYS

There is much speculation about which goods and services will attract VAT rises in the emergency budget due on 22^nd June.  Chartered Accountants Clement Keys is warning that printed media is one of the most likely to be changed from zero rated.

“The rise in different forms of electronic media which are not zero rated will have an influence and prompt the government to bring print in line with the new media age,” says Director of VAT Services Steven Simmonds. “The media is undergoing dramatic change at the moment.  Those who choose to buy a printed newspaper or magazine pay no VAT on that purchase whilst those who download an electronic book or take their news from a subscription website will have to pay VAT. " 

“This will not be welcome news for those publishing firms that are struggling to compete with the digital age.  The Times and the Sunday Times have just introduced a subscription service for their new online service in an effort to stem the losses incurred from reduced advertising revenues and falling newspaper sales."

“E-books and the newly launched i-pad are other examples of different electronic media that are threatening traditional media forms that currently incur VAT"

“The government will certainly be looking to review the scope of zero and reduced rated goods and services and with changes to certain zero rated goods likely to be very unpopular with voters such as children’s clothes then the options are limited.”