1st – 2nd December 2020
By Appellants Notice filed on 3 March 2020, HMRC appeal, with part permission from the Upper Tribunal (Tax and Chancery Chamber), its decision dated 24 December 2019, whereby the Upper Tribunal (UT) allowed News Corp’s appeal from the First Tier Tribunal’s (FTT) decision dated 8 March 2018.
The issue is whether News Corp’s digital services (ie e reader, tablet, smartphone and website digital editions of 4 newspapers) are zero rated for VAT purposes as “newspapers” under s30 (2) and Item 2 , Group 3 of Schedule 8 of the Value Added Tax Act 1994 (VATA). The FTT concluded they were not and dismissed News Corp’s appeal for recovery of VAT and interest in respect of two periods of time. The UT found the FTT erred in concluding Group 3 only includes goods rather than services. The UT concluded in summary that the “always speaking” principle required “newspapers” in Group 3 to be interpreted to include digital services.
