HMRC to appeal News Corp decision on VAT liability of digital publications

HMRC has confirmed it will continue to treat supplies of digital publications as standard-rated and is to appeal the Upper Tribunal decision in News Corp UK and Ireland Ltd [2019] UKUT 404 (TCC) to the Court of Appeal. The Upper Tribunal held that digital versions of News Corp’s newspapers were equivalent to the corresponding printed newspapers and zero-rated.

In Revenue and Customs Brief 1/2020: VAT liability of digital publications - Upper Tribunal in News Corp and Ireland Ltd, HMRC states its intention to reject any claims made in reliance on the News Corp decision. As HMRC’s policy has not changed, taxpayers may still protect their position as they will be able to appeal HMRC’s decision. These appeals will then be considered once the outcome of the News Corp litigation is known.

Where an organisation considers that the decision in News Corp applies to its own supplies of digital publications, it should provide HMRC with full details in writing, including:

• a full description of the supplies for which the claim is being made and which item of of VATA 1994, Sch 8, Group 3 the supplies fall;
• clear reasons why it is considered that the claim should be treated in the same way as the supplies in the Upper Tribunal decision; and
• a breakdown of the amounts of overpaid VAT being claimed by prescribed accounting period and the method by which they have been calculated.

All claims will be subject to the four-year time limit.