cease to amaze us?
One would have thought that crap magazines were
designed to control low brow minds, especially
women in salons.
BUTT, no.
It's just another tax dodge.
checkitout: The Guardian
Sky
magazine tax loophole saved broadcaster up to £40m a year
Satellite
broadcaster saved millions in VAT by charging Sky customers monthly fee for
cable guide magazines
Bibi van der Zee and David Leigh
, Monday 19 November 2012 17.55
GMT
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.
A
court battle involving Debenhams at the beginning of the decade highlighted the
problem of VAT avoidance through the artificial splitting of services between different parts of a
corporation.
But
in 2005 UK courts ruled that cable companies were allowed to deduct VAT on
"cable guide" magazines and similar publications, if they structured
them so that customers did receive a
genuine product from a separate company, delivered at a fair price.
In
2005 Sky relaunched BSkyB Publications with James Murdoch on the board, and in
2007 they took production of Sky magazine in-house
and also began distributing Sky Sports magazine and Sky Movies magazine. A
small note on the Sky magazine masthead in 2011 told readers: "£2.20 of
your package price is paid by you to BSkyB Publications Ltd for this
magazine."
Some
readers raised objections on online talkboards
to the fact that when they had tried to cancel the "crap" magazine
they had been told that their subscription was discounted by the magazine's
price, and if they opted out they would no longer get the discount.
