Booksellers Voice VAT Concerns Regarding Scottish Referendum

Booksellers north of the border are raising their concerns over VAT in the event that the Scottish referendum should lead to a ‘yes’ vote, which would result in the country’s independence.

Suppliers like The Mainstreet Trading Company, Far From the VAT-books-scottish-referendumMadding Crowd, The Edinburgh Bookshop and Elgin & Banchory are just some of Scotland’s best-loved bookshops hoping to increase awareness of what an independent Scotland could mean for booksellers and book-buyers.

Should the Scottish referendum result in a ‘yes’ vote, the country would be forced to reapply for membership within the European Union, where the VAT on printed books would be surplus to a 15% minimum.

If Scotland was made independent from the rest of the UK, it would no longer be partial to a 0% VAT rate on printed books (as is the current case for Ireland and the UK), but would instead need to adhere to the EU rate of VAT for all products of the written word.

This means that customers could be paying up to 15% more for their books than they do now, which sellers and traders claim could harm the industry.

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In an open letter to The Bookseller, bookshops and publishers collectively warn: [quote]Bookshops would be faced with either applying the VAT required, i.e. many hours spent pricing books, only to reinforce the view that Amazon is the cheaper option and, in all likelihood, tip those loyal customers over to the dark side. Or, absorb the VAT and in many cases, render themselves unprofitable at a stroke, with the double hit of losing 5% per sale and paying publishers 5% VAT on purchase.”[/quote]

At the moment, online sellers like Amazon are enjoying a 3% VAT rate on printed books by running their services offshore from Luxembourg. From January 2015, however, new VAT rules will bring this perk to an end for the company.

Meanwhile, countries within the EU enjoy VAT at varying rates so long as it is no less than 5% (not including Luxembourg). However, thanks to the European Comissioner for Enlargement Stefan Fule, new EU members must apply a 15% minimum until allowed otherwise.

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If Scotland should join the EU through the normal accession route, the Commissioner has said that it will have to apply for the normal 15% VAT rates, with a VAT rate of “no less than 5%” set on a limited list of certain supplies. Either way, this will result in a minimum 5% levy on printed books. [quote]”Reading and education have always been a matter of pride in Scotland and it would be tragic if the nation’s love of literacy were undermined by such a charge,”[/quote] the letter concluded.