VAT removed from ebooks

One of the unexpected consequences of the Covid-19 pandemic has been the removal of VAT from ebooks. Previously, although printed books are zero-rated for VAT, ebooks and online subscriptions have not been exempted. In March, UK Chancellor Rishi Sunak announced this would change at the end of 2020, bringing ebooks in line with printed books. However, the restrictions enforced by the spread of the virus have prompted the government to bring forward their plans to 1 May. “We want to make it as easy as possible for people across the UK to get hold of the books they want whilst they are staying at home and saving lives,” said the chancellor, Rishi Sunak. What this means for authors is that the cost of creating an ebook is now cheaper, and they can choose to reflect this in the selling price of their ebook, or increase their royalty per book sold. VAT in the UK is currently 20%.