BSkyB has been been informed that it has to pay VAT at a rate of 17.5% on the programme guide that it sends to it's subscribers each month. The decision could cost BSkyB up to  £20 Million each year. Coupled with the costs of providing free Digiboxes for new subscribers, this taxation decision is really going to hit profits at BSkyB.

BSkyB had continually argued that the magazine was supplied as a separate service. It was however included in the subscription to the BSkyB channels and subscribers did not have the option of unsubscribing from the magazine with a correspondingly reduced channels' subscription fee. Since the magazine was part of the subscription, it was therefore liable to Value Added Tax at the rate of 17.5%.

Books, magazines and newspapers are not liable to VAT in the UK. In Ireland books are VAT exempt. However in less civilised parts of the EU, ignorant governments tax knowledge.