VAT, or Value-Added Tax, is a kind of tax added to the value of products and services. It is charged in the form of a percentage of the products and services’ selling price. It must be paid upon purchase.
Businesses are required to apply VAT to the customer’s purchases as stipulated by the government. Some items, such as food, newspapers, magazines and children’s clothes, and most recently sanitary products, are exempt.
Simply put, Zero-Rated items, such as books, directories, and timetables, are not subject to VAT. Products like business cards, gift vouchers and postcards are.
HMRC uses specific criteria to determine if whether printed items are, or are not, subject to VAT.
HMRC also uses explicit definitions for print products, and how variations on criteria can render products zero-rated, or VAT rated.
Zero-rated means the products and services are charged 0%. In a way, these products are VAT free. However, you must record them in your accounts and report them on your VAT Return. Zero-rated print products include the following:
Standard Rate means products and services are charged a 20% rate from the selling price. Most products and services have a standard rate unless the goods are classified as Reduced Rate or Zero Rate goods. The following print products have the Standard Rate applied:
There are some items on both the lists for zero-rated and standard-rated products that have some exceptions.Flyers, Leaflets, and Pamphlets
A Zero Rate is applied to flyers, leaflets, and pamphlets unless they do not follow the qualifications to be considered as such.
According to VAT Notice 701/10, brochures and pamphlets are not defined by law. This means, whether or not a print product is a brochure or pamphlet is “a matter of fact and impression.” However, single-sheet brochures and “wallet” type brochures with a flap may be zero-rated provided they:
convey information contain a substantial amount of text, with some indication of contents or of the issuing organisation are not primarily designed to hold other items
are supplied complete
Like brochures and pamphlets, they are also not defined by law. However, the print products will not be considered as leaflets and VAT will be applied if they are used for any of the following:
If budget is key, the guide above can help you identify possible zero-rated product alternatives. Contact us and we can look at your order and offer an alternative solution where possible.
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