Digital comics

UK Removes 20% VAT on Digital Comic Sales, Will ComiXology Follow?


Bleeding Cool pointed out earlier this year that a comic-reading political adviser to the British Conservative government who buys loads of stuff from ComiXology, specifically placed in the budget plans to scrap 20% VAT on sales of digital publications. This came the week after Amazon-owned ComiXology decided to stop subsidizing the cost of UK and European digital comics by a) bringing the exchange rate closer to what it actually was, b) not absorbing the cost of sales taxes and c) adding something extra to make up for all the money they had lost due to a) and b) over the past five years. As a result, digital prices rose by up to 70%, not only in the UK, but also in the EU, as Euro prices matched Pound prices.

Well, as of yesterday, the UK government decided not to wait until the end of the year, and for the UK to leave the EU properly, to implement this change. Digital publications, from comic books to newspapers to clitoris and bibles, currently have a zero sales tax rating.

The move will potentially reduce the cost of e-books and newspapers, making reading more accessible when people stay home. A study by the National Literacy Trust indicates that 1 in 4 pupils receiving free school meals say they read fiction digitally, compared to 1 in 6 of their peers not eligible for free school meals and that more than 45% of children prefer to read on a electronic device.

Chancellor of the Ezchequer Rishi Sunak said zero-rate VAT will now apply to all e-publications from today, seven months ahead of schedule – potentially reducing the cost of an e-book to £12 from £2, subscriptions electronic newspapers up to £25 a year and a comic book at £3.99 per 66 pence.

We want to make it as easy as possible for people across the UK to get the books they want while they stay at home and save lives. That’s why we have accelerated plans to remove VAT on all electronic publications, which will allow publishers to sell their books, magazines and newspapers at a lower cost.

Cultural Secretary Olivier Dowden noted:

This digital publication subscription tax relief will boost our world-class publishers, save consumers money and reflects the rise in popularity of e-reading as we stay home to protect the NHS. I hope this benefits the news industry through increased sales of e-newspapers as they continue to provide a vital public service by giving people accurate and reliable information about the coronavirus.

ComiXology and Amazon should lower their prices accordingly. Maybe not at pre-Brezit prices, but there should be a noticeable change from the $1 to £1 price they are using now. But the change should also make it easier for creators to self-publish digitally and in print, as a significant cost and many administrative burdens have been instantly eliminated. This is the kind of thing Conservative governments are supposed to do – but rarely do.

The change went into effect today. We’ll be watching to see if ComiXology and Amazon follow suit. They really should. Maybe wait to buy this week’s comics digitally until the change comes.

UK Removes 20% VAT on Digital Comic Sales, Will ComiXology Follow? Image from Her Majesty’s Treasury.

On average, publishers in the UK are reporting an increase of around a third in e-book consumption during the crisis, with some publishers reporting an increase of up to 50%. In the past seven days alone, TI media subscriptions are up 200%, while Hearst new subscribers are up more than 100% year-over-year in the second half of March .

Will de Peyerspokesperson for Ax the Reading Tax Campaign, said:

Abolition of the reading tax with immediate effect is exactly the Chancellor’s right response in these difficult times. With people doing the right thing and staying home, it’s great that they no longer have to pay e-book tax to keep them and their kids entertained.

Stephen Lotinga, CEO of the Publishers Association, said:

We welcome the news that the government has taken this step to significantly accelerate its plans to remove VAT on e-books. It’s a boost for publishers, readers and authors, which is especially important at this difficult time. We hope it will enable more people to easily access and benefit from the convenience, entertainment and knowledge that books provide.

Owen MeredithCEO of the Professional Publishers Association (PPA) said:

Today’s announcement is very good news and a necessary step. The APP called for the zero rate announced in the budget to be brought forward to the start of the tax year and I am glad the government listened and acted.

In these extraordinary times, consumers are increasingly hungry for trusted sources of news, information and analysis and are turning to the pages of magazines, both print and digital. Ending the historic digital VAT penalty is now a boon for consumers looking for reliable news and entertainment and a vital lifeline for publishers. As we are all spending more time at home to stop the spread of this virus, subscribing to a magazine is a great way to keep yourself entertained and pursue your hobbies and interests with confidence journalism and quality.

jonathan douglasChief Executive of the National Literacy Trust, said:

With schools and libraries now closed, it is essential that children and families can still access the life-enhancing world of books. Removing VAT from digital publications will make this more possible for families, for whom access to stories will provide much-needed inspiration and comfort in this time of uncertainty.

Barbara Hayes, The Deputy Chief Executive of the Authors’ Licensing and Collecting Society (ALCS), said:

The ALCS was proud to be part of the successful Ax the Reading Tax campaign, which called for the removal of VAT on e-books to bring them into line with their print counterparts. We are very pleased that the Chancellor has taken note of this and decided to postpone this disposal until tomorrow, which will ensure that e-books will be more easily accessible and affordable for those currently staying at home.

Hunter IsobelManaging Director of Libraries Connected, said:

Since libraries closed in March, e-lending has exploded as people have turned to reading for education, entertainment and solace. Online memberships jumped 600% in the first week, and online loans have now tripled. Removing VAT from e-book licenses will help libraries help children learn at home and get more titles into readers’ hands when they need them most.

Nothing from Amazon or ComiXology yet, although we asked. The news rubs shoulders with UK newspapers receiving up to £35m in additional advertising revenue from the government as part of the coronavirus communications campaign.

The £35 million in additional advertising revenue will be split between local, regional and national print media and will be a welcome boost to the media industry suffering from the collapse in private sector advertising spending. These plans will be constantly reviewed over the next three months to ensure that the campaign is as effective as possible. The government says it recognizes the vital role the media, including newspapers, play in ensuring the provision of reliable, high-quality information and their ability to reach remote and harder-to-reach communities, such as BAME and older communities. In light of this, the government says it has established advertising partnerships with the country’s favorite and most trusted media titles, to deliver important government communications on the coronavirus. This has allowed the government to tap into the powerful and familiar voices of over 600 national, regional and local titles across England, Scotland, Wales and Northern Ireland. It is estimated that these partnerships will reach 34 million people every day and 92% of adults in the UK every month.

Posted in: Comics | Tagged: amazon, comixology, digital comics, sales tax, VAT

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