What is and isn’t VATable?
Taxes in this country are much maligned and the so-called ‘Tax Man’ is utterly vilified. Obviously, without taxes a country cannot function and the idea of our tax money going straight into some sly, black-cloaked villain’s pocket is ludicrous. However, that’s not to say that the system is made easy for us or the logic clear. Hopefully this post will help elucidate matters somewhat.
What’s the logic behind it?
Even this is difficult to pin down or to apply with certainty, but there are reasons why some things are liable to VAT. HMRC would no doubt describe these reasons as ‘transparent’, hoping that sharper minds would not notice that the word transparent can also mean invisible.
However, you can make some presumptions without looking anything up, e.g. that if the item being printed is intended for resale to the public, then it will be ‘standard rated’ (i.e. subject to the full VAT). Two other baseline factors are as follows and usually apply to flyers or leaflets:
If the document can be used to gain admission to a premises then it automatically becomes a ticket and is standard rated.
If the document can be used to obtain a discount for goods or services, it becomes a voucher and is standard rated.
If the document contains a region (more than 25%) which is intended for writing on, such as a form, it is standard rated.
- Documents intended for resale to the public are standard rated
- Documents with the purpose of admission to premises are standard rated
- Documents with the purpose of obtaining a discount are standard rated
- Documents intended for writing on (area over 25%) are standard rated
What if I’m not sure?
It’s not always clear whether these rules apply to a print job, but there is an easy way to check. The arbiter of these things is HMRC themselves, and they have their own reference at www.hmrc.gov.uk – the easiest way is to search at the top of that page for ‘zero-rating of books’, which will take you to several relevant links.
However, if you just want a quick reference, then there is another site with the very original name of www.isitvatable.com – a simple demarcation of VATable and non VATable with a search field.
What if I represent a charity?
Charities may benefit from zero rating on all printed materials intended for distribution or advertising to the public, including for recruitment purposes. The only rule is that the printed material must be relevant to and contain information about the charity’s main objective, e.g. animal rights.
There are some exceptions to charities’ VAT exemption, though:
Direct mail and telesales
Anything on a charity’s own website
Anything where no supply of time, equipment or space has been made by a third party
(advertisement on the charity’s own greetings card, for example)
Exhibition stands and space
Commemorative items (pens, clothing, etc.)
This is a list of common items often queried by print professionals. It should be noted that no assumption of zero rating should be made on items which don’t appear in this list. You should also satisfy yourself that the item fulfils the logical criteria for VAT, rather than just rely on this list. It’s simply a reference, taken from www.isitvatable.com on 14-10-13.
Autograph albums (uncompleted)
Bills of lading
Bills of quantity (blank)
Cheques and cheque books
Football pool coupons
Framed decorative maps
Inlay cards for cassette, CD or video
Insurance cover notes
Log books (blank)
Lottery tickets and cards
Note books, pads and paper
Order books and forms
Parts of books
Postcards (whether completed or not)
Price cards and tags
Receipt books and forms
Reply-paid coupons and envelopes
Reproductions of paintings
Scrap books (blank)
Shade cards (unless they contain substantial printed text)
Stamp albums (whether completed or not)
Time cards and sheets
Tokens Standard-rated (but see paragraph 5.4)
Accounts (fully printed)
Agendas (fully printed)
Articles of association (complete in booklet form)
Autograph books (completed)
Bills of quantity (completed)
Charts (geographical or topographical)
Colouring books (children’s)
Company accounts and reports
Holiday and tourist guides
Loose leaf books
Mail order catalogues
Memoranda of association (completed in booklet form)
Orders of Service
Painting books (children’s)
Price lists (fully printed leaflets or brochures)
Rag books (children’s)
Scrap books (completed)
Ships’ logs (completed)
Timetables (in book or leaflet form)
Still not sure?
Don’t worry, it’s down to us to get this right – it’s just useful for you to see roughly how it works. The sad fact is that many printers will simply charge VAT on everything (and potentially pocket the difference) rather than go to the effort of checking. We won’t do that at Firstpointprint.