News Corp UK & Ireland Ltd v Revenue and Customs

Factual and Procedural Background

Company A supplied digital editions of several national titles between 2010 and 2016. Agency A assessed Value Added Tax (“VAT”) on those supplies. Company A contended that the supplies qualified for the zero-rate applicable to “Newspapers, journals and periodicals” in Group 3, Schedule 8 of the Value Added Tax Act 1994 (“the VAT Act”). The First-tier Tribunal and Upper Tribunal rejected Company A’s claim. The Court of Appeal dismissed Company A’s appeal. Company A appealed to the Supreme Court, where Judge Leggatt delivered a concurring opinion, agreeing with Judge Hamblen and Judge Burrows that the appeal should be dismissed.

Legal Issues Presented

1. Whether the digital editions supplied by Company A were “newspapers” within Item 2, Group 3, Schedule 8 of the VAT Act, thereby attracting a zero rate of VAT.
2. Whether the “always speaking” doctrine of statutory interpretation justifies extending the term “newspapers” to include digital editions introduced decades after the relevant legislation was enacted.

Arguments of the Parties

Company A’s Arguments

• Under the “always speaking” doctrine, statutory terms should be read in light of technological advances; therefore “newspapers” must include their digital counterparts.
• The social purpose behind zero-rating newspapers—promotion of literacy, dissemination of knowledge and democratic accountability—is equally met by digital editions, whose content is “essentially the same” as print editions.
• No extension of the zero-rate is involved because newspapers have always been zero-rated; digital delivery is merely a new format.

Agency A’s Arguments

• When the original zero-rating was enacted (1972) and when EU “stand-still” provisions froze zero-rated items (1975/1991), digital editions did not exist and were outside the ordinary meaning of “newspapers.”
• European law barred any extension of zero-rating during the relevant period; only a later legislative amendment (effective 1 May 2020) expressly added electronic publications.
• Strict interpretation of tax exceptions requires treating “newspapers” narrowly, confined to physical goods.

Table of Precedents Cited

Court's Reasoning and Analysis

Judge Leggatt concurred in dismissing the appeal but delivered separate reasons:

1. The “always speaking” doctrine, while useful in contexts involving linguistic evolution, changing social values or scientific advances, does not create a presumption that statutory terms automatically extend to new technology.
2. The correct approach is ordinary purposive interpretation: identify the meaning of “newspapers” in light of the VAT Act’s structure and purpose.
3. VAT zero-rates are fiscal derogations and, under both EU law and domestic principles, must be construed strictly; any ambiguity must be resolved narrowly.
4. The legislative choice to zero-rate newspapers in 1972 was a policy decision within a broad political discretion. It did not imply zero-rating all future modes of delivering similar content.
5. Form as well as content is relevant: digital editions (a service needing electronic devices) differ economically and socially from physical goods. Distinguishing them is not irrational.
6. Subsequent EU legislation explicitly excluded “electronically supplied services” from reduced rates until 2020, confirming that Parliament had not already captured such supplies.
7. The 2020 amendment adding Item 7—which expressly zero-rates electronic publications—implies that Items 1–3 never encompassed electronic formats.
8. Accordingly, the narrower sense of “newspapers” restricted to physical printed items is adopted.

Holding and Implications

Appeal dismissed. The Court held that digital editions supplied between 2010 and 2016 were not “newspapers” within Item 2, Group 3, Schedule 8 of the VAT Act and therefore did not qualify for zero-rating.

Implications: Company A remains liable for VAT on its digital editions for the relevant period. The decision confirms a strict interpretive approach to domestic zero-rate provisions and leaves expansion of preferential VAT treatment for electronic publications to legislative amendment, a course followed from 1 May 2020. No new precedent was set beyond reaffirming existing principles of strict construction in tax law.