BSkyB ready to fight over VAT ruling

BSkyB, the satellite broadcaster whose bold takeover bid for Manchester United was thrown out by trade secretary Stephen Byers last week, is preparing to fight the government again by stepping up its opposition to a VAT bill worth #45m and rising.

The company said this week it would fight Customs & Excise all the way to the High Court over a ruling that its subscription TV guide should be subject to the standard VAT rate of 17.5%.

BSkyB insists the monthly #3.25 TV guide, sent to over six million analogue subscribers, is a separate ‘supply’ to its TV channels and qualifies for a zero-VAT rate. The guide used to have a zero rating, in line with printed materials, but Customs argues it is bundled into the broadcast service and should not be treated separately to entertainment.

The company has now presented evidence to the VAT and Duties Tribunal which is currently deciding whether to overturn last May’s ruling.

BSkyB said: ‘The TV guide and TV are totally different. We’re prepared to fight very hard for this.’ With cable companies like Cable & Wireless and Telewest offering TV guides to subscribers, the tribunal decision, expected next month, could set a precedent for the media and other industries.