On Sky and VAT

A magazine for satellite TV customers published by BSkyB was used as a tax avoidance scheme that saved the company up to £40m a year.

The broadcaster had been saving millions in VAT by charging satellite customers a nominal £2.20 a month for the Sky magazine, using a tax loophole that has now been closed. Magazines, along with books and newspapers, are normally zero-rated for VAT, and this meant Sky could avoid VAT on a small but significant percentage of revenue. The saving, at about £3 to £4 per person, would have amounted across Sky\’s 10 million subscribers to at least £30m to £40m a year.

Err.

Wasn\’t it Sky\’s customers who didn\’t have to pay £30 to £40 million a year in VAT?

Do we, for example, say that Teh Grauniad is benefitting from not charging VAT to customers? Or that cursomers are benefitting from not paying VAT on Teh Grauniad?

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