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.

Criteria include:

  • The weight of paper used
  • The amount of text
  • The item’s main function
  • Whether it’s designed to be kept
  • Whether there is an area for completion
  • What percentage of the overall product it represents?
  • How much of the original product is retained?
  • How it is bound, and age of the product

HMRC also uses explicit definitions for print products, and how variations on criteria can render products zero-rated, or VAT rated.

Zero Rate Print Products

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:

  • Books including children’s picture books, painting books, picture books, and recipe books
  • Booklets and brochures
  • Funeral Booklets
  • Bulletins
  • Catalogues
  • Circulars
  • Directories
  • Election materials
  • Flyers and leaflets
  • Journals
  • Magazines
  • Manuals
  • Maps, charts, and topographical plans
  • Menus
  • Newspapers
  • Pamphlets
  • Periodicals
  • Publications
  • Fully-printed price lists
  • Printed or copied music
  • Sports programmes

Standard Rate Print Products

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:

  • Acceptance Card
  • Announcement Cards
  • Appointment Cards
  • Business Cards
  • Calendars
  • Certificates
  • Compliment Slips
  • Coupons
  • Delivery Notes
  • Diaries
  • Draw/lottery Tickets
  • Envelopes
  • Folders
  • Forms
  • Greetings Cards
  • Incomplete Publications
  • Invitation Cards
  • Invoices
  • Labels
  • Letterheads
  • Memo Pads
  • Menu Templates (Self Completion)
  • Order Books
  • Photocopies
  • Postcards
  • Posters
  • Questionnaires
  • Receipt Books
  • Stationery
  • Stickers
  • Tags
  • Tickets
  • Visiting Card
  • Special Rules and Exceptions

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.

Brochures and Pamphlets

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

Leaflets

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:

  • as a calendar
  • to obtain admission to premises
  • to obtain a discount on goods or services
  • as reference material
  • for completion or return
  • If 25% or more of the product has an area to write in

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.