Following the proposal of the EU Council to authorise Member States to reduce the VAT rate on electronic publications to bring it in line with the rate its print equivalents, the UK had taken the decision to reduce the rate from 20% to 0% from1st December 2020.
However, due to the current health crisis (covid-19), the date has been brought forward to 1st May 2020.
From 1st January 2021, the UK Government has confirmed that the postponed imported Value Added Tax accounting mechanism will be introduced, similar to the reverse charge mechanism for all imported goods. This new mechanism will allow businesses registered for VAT in the UK to avoid paying VAT to clear their goods through UK customs. Instead, import VAT amounts will be reported on VAT returns and will be integrated in the same way as a reverse charge transaction. The government hopes this will mean savings on shipping and bank charges for businesses that regularly import goods, as well as improved cash flow, as they will no longer have to wait for import VAT to be refunded by the authorities.
