After a rollercoaster ride through the courts, the Supreme Court has sided with HMRC in a case concerning the zero rating of digital editions of newspapers (News Corp UK & Ireland Ltd v HMRC [2023] UKSC 7).
News Corp is the publisher of The Times, The Sunday Times, The Sun and The Sun on Sunday. News Corp argued that the digital editions of these publications were subject to zero-rate VAT for the period 30 August 2010 to 4 December 2016, as they were “newspapers” for the purposes of the VAT Act. HMRC argued that News Corp was not entitled to zero-rate the supply of these digital editions. The First-tier Tribunal found that digital editions were not “newspapers” for the purposes of the VAT Act 1994, and so rejected News Corp’s claim for recovery of over £35 million. The Upper Tribunal allowed News Corp’s subsequent appeal. HMRC then successfully appealed to the Court of Appeal, and the Supreme Court has confirmed that ruling.
The case raises a number of important technical considerations but on the specific point about the treatment of newspapers, the conclusion of the Supreme Court was:
” … the term “newspapers” in Item 2, Group 3, Schedule 8 of the VAT Act does not include the digital editions, with the result that the supplies of the digital editions by News Corp during the relevant period were not zero-rated.”
In the course of the long judgment, the Supreme Court ruling considered numerous legal aspects, including all of the following:
- domestic statutory interpretation: words, context and purpose; and “always speaking” (the principle that a statute should be interpreted taking into account changes that have occurred since the statute was enacted);
- EU law: the strict interpretation of exemptions and the effect of the standstill provision;
- the proper interpretation of “newspapers” in Item 2 (leaving aside fiscal neutrality);
- fiscal neutrality (the principle that goods and services that are “similar” should be treated the same way for VAT purposes);
- changes in language, values, scientific knowledge;
- the meaning of “newspapers”.
https://www.bailii.org/uk/cases/UKSC/2023/7.html
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