VAT on printing is determined by a set of factors
The VAT on printing business changes according to some quite loosely termed rules from HMRC. Some printed matter are zero-rated VAT and others are not, but what’s affected and what isn’t?
Having moved to the mainland from an island that does not have a VAT regime, the idea of VAT was enough to boggle my mind – let alone all of the VAT rules regarding the selling of printed material! The article below outlines some of the main guidelines (without the boring bits!) from HMRC.
Books and booklets
Zero-rated (0% VAT*) items are described as:
- literary works
- reference books
- directories and catalogues
- antique books
- collections of letters or documents permanently bound in covers
- loose-leaf books, manuals or instructions, whether complete with their binder or not
- amendments to zero-rated loose-leaf books, even if issued separately
Standard rated (20% VAT*) are described as:
- books of plans or drawings for industrial, architectural, engineering, commercial or similar purposes
- picture card and stamp albums, unless they contain a substantial amount of reading matter which is complete in itself, and no more than 25% of the album is set aside for the mounting of cards and stamps
- completed stamp albums, and
- products that are essentially stationery items, for example, diaries and address books
Brochures and phamplets
According to HMRC, brochures are not defined in law they use the following description to determine what a printed product is: ‘whether a particular product qualifies as a brochure or pamphlet is a matter of fact and impression’
A brochure is an item that contains several sheets of reading material and paper that is folded or fastened in some way. They usually contain advertising, illustrations and text.
A phamplet is is like a brochure, but contains political, social or intellectual information.
Single sheet brochures (e.g 4pp folded sheet) and ‘Wallet’ type brochures designed with a flap may be zero-rated provided they:
- convey information
- contain a good amount of text, with some indication of contents or of the issuing organisation
- are not designed to hold other items
- are supplied as a complete item
Leaflets/ flyers have a variety of different uses but most of the time will be zero rated unless they are laminated. HMRC states that to qualify for 0% VAT, the item must be designed to be thrown away after a few reads. Leaflets which are laminated are considered to be designed to keep and therefore are not disposable or zero rated.
If a leaflet is designed to accompany a product or service then it will be exempt, however if it is to be used in its own right then VAT will apply.
Stationery will always have VAT as it is designed to be kept (for example business cards) or to be written on (compliment slips)
Some companies will charge VAT on all products for easier invoicing, however we like to review each order individually and identify which orders will be zero rated.
If you would like to chat about an upcoming project (and how VAT on printing may effect it) Call us for free on 0800 412 5333.
Please note that obviously we aren’t tax advisors, these are just our interpretations of situations we often come across. For specific VAT questions, please contact HMRC directly. VAT rules may change in future and this post may not be updated.