Newspapers are to remain zero-rated for value added tax – despite moves by the government in the budget to remove other similar tax breaks.

Chancellor George Osborne told parliament yesterday that a number of loopholes in the way VAT is applied would be closed, but that the government remains committed to a zero per cent rate for the press.

He said in the budget speech: “We’re publishing our plans today to remove loopholes and anomalies, but we keep the broad exemptions on food, children’s clothes, printed books and newspapers.”

The majority of EU countries levy VAT on newspapers. Complications arise in the UK when newspapers sell digital editions (which are charged VAT at 20%) and bundle their print and digital subscriptions together.