VBOOKS8507 - Determining whether an e-publication is “predominantly” devoted to advertising, audio or video content

Determining whether an e-publication is predominantly devoted to advertising, audio or video content in many cases will be clear by considering the purpose of the product (and as part of the assessment referred to in VBOOKS8504).

For example, an e-publication that is focussed on delivering news and providing analysis and commentary on news stories is likely to be a zero rated newspaper. On the other hand, an e-publication that is focussed on encouraging people to buy products and contains few news stories is likely to be an e-publication predominantly devoted to advertising and therefore standard rated. In these sorts of cases there may be no need to carry out calculations to determine the percentages of news content, advertising content, video content etc.

However, where a product has no clear purpose, businesses will need to consider all the facts and circumstances and objectively assess the relative mix of content. In some cases, it may be appropriate to measure different types of content by performing a numerical calculation. For instance, comparing the number of news articles with the number of advertisements and video clips or by carrying out a word count or by looking at the amount of space taken up.

There may be other ways to determine if an e-publication can be zero rated, for example by considering the cost to the business of providing different content.

As there is no determinative test to establish whether an e-publication is predominantly devoted to advertising, audio and / or video content, HMRC will accept a fair and reasonable assessment based on a sensible method.

Example 1: An auction house sells e-brochures containing information about lots in a forthcoming auction. Since the e-brochure is predominantly advertising, its sale is standard rated.

Example 2: A business supplies an e-audiobook that is narrated by a well-known actor. It is designed only to be listened to. Since this e-audiobook is wholly devoted to audio content, its supply will be standard rated for VAT purposes.

Example 3: A business supplies an e-book that incorporates an audio function which enables the reader to listen to the book being read by a synthetic voice when they are tired of reading. The e-book is designed primarily to be read, and the audio function is incidental. Since this e-book is not wholly or predominantly devoted to audio content, its supply will be zero rated for VAT purposes.

Example 4: A business offers its customers access, by subscription, to an e-magazine which consists of a range of articles about current affairs, the arts and various feature articles. It also includes advertising and video content related to the articles, but the e-magazine is primarily sold and purchased for its articles. Since, this e-magazine is not wholly or predominantly devoted to advertising and / or video content, its supply will be zero rated for VAT purposes.