VAT on books
VAT on books in the United Kingdom
The UK zero-rates printed books and, since 1 May 2020, ebooks. Audiobooks are the exception. They pay the standard 20%, on CD or as a download. The UK left the EU VAT system, so EU rules and the One-Stop Shop do not cover UK readers.
This is general information, not tax advice. Rates and rules change, and your own situation matters. Check with HMRC on GOV.UK or an accountant before you decide.
The rates
| What you sell | Rate | Type | Source |
|---|---|---|---|
| Printed books | 0% | Zero rate | GOV.UK, VAT Notice 701/10 |
| EbooksSince 1 May 2020. Not for e-publications that are mainly advertising, audio or video. | 0% | Zero rate | GOV.UK, VAT Notice 701/10, section 9 |
| AudiobooksPhysical or digital, audiobooks stay at the standard rate. | 20% | Standard rate | GOV.UK, VAT Notice 701/10, section 9.5 |
| Most other goods and services | 20% | Standard rate | GOV.UK, VAT rates |
What to know about the United Kingdom
- Zero-rated is not the same as exempt. A zero-rated ebook is still a taxable sale, it just carries 0% VAT, so it can count toward registration. VAT Notice 701/10
- The ebook zero rate does not cover e-readers, apps and software, or publications mainly for filling in, such as some workbooks and planners. VAT Notice 701/10
- GOV.UK says it plainly. Audiobooks stay at the standard rate, on CD or as a download. A UK reader pays 0% on your ebook and 20% on the audiobook of the same book. VAT Notice 701/10, section 9.5
UK rules for UK readers
If your business is in the UK, you must register for VAT once your taxable turnover over the last 12 months passes £90,000, or is expected to pass it in the next 30 days. Zero-rated sales such as books and ebooks count toward that figure.
If your business is outside the UK, there is no threshold. You have to register for UK VAT if you make taxable sales of any value in the UK, and selling a digital product such as an ebook or audiobook to a UK reader is one.
Printed books sent into Great Britain in a parcel worth £135 or less are taxed at the point of sale, so the seller charges and accounts for UK VAT. For books that VAT is 0%. Above £135, normal import VAT and customs rules apply.
Source: GOV.UK, register for VAT
Who charges the VAT when you sell on Lanternbee
You do. Each author connects their own Stripe account, so you are the seller and the money goes straight to you. At checkout, Stripe Tax works out the right rate for where the reader is and adds it to the order. It collects tax in the places where you have added a tax registration in Stripe, so you still register where you need to, file the returns and pay what you collected. Stripe on tax registrations.
Questions authors ask about the United Kingdom
Do UK readers pay VAT on ebooks?
No. Ebooks have been zero-rated since 1 May 2020, the same as printed books. The exception is e-publications that are mainly advertising, audio or video.
Why do audiobooks pay 20% in the UK?
The zero rate covers books and e-publications, and GOV.UK says audiobooks stay at the standard rate whether physical or digital. So an audiobook sold to a UK reader carries 20% VAT.
I live outside the UK. Do I need to register for UK VAT?
If you sell ebooks or audiobooks to UK readers, GOV.UK says businesses based outside the UK must register for any amount of taxable UK sales; there is no threshold. Zero-rated ebooks still count. Check with HMRC or an accountant for your own case.
Does the EU One-Stop Shop cover UK sales?
No. The UK is outside the EU VAT system, so UK sales go on a UK VAT return, not your OSS return.