Here’s a handy guide to shed some light on Printing and VAT, when you should and shouldn’t be paying on printed products.
When is VAT applicable for printed items?
We all know about VAT, it is paid on a whole range of products that we all buy every day although exactly why and when is not always black and white. There are three main categories for calculating; the standard at 20%, a reduced at 5% and Zero Rated where it is not applicable. Luckily we will only be concerned with the 20% and Zero categories.
Zero Rated Items
These are items which do not require VAT under ‘VAT Notice 701/10: zero-rating of books and other forms of printed matter’. This notice includes:
Books, Booklets, Brochures, Catalogues, Directories, Flyers and Leaflets, Magazines, Manuals, Maps, Sheet Music, Newsletters, Newspapers, Pamphlets and Folded Leaflets and Timetables.
20% VAT Rated Items
There are also items which require VAT to be paid at 20%. As a general rule of thumb these are items that are to be kept, displayed publicly or to be used as a business amenity. These items include:
Appointment Cards, Business Cards, Calendars, Certificates, Compliment Slips, Coupons & Vouchers, Envelopes, Folders, Forms, Invitations, Invoices, Labels, Letterheads, Postcards, Posters, Stationary, Stickers and Tickets.
The Exception That Makes The Rule
Of course to every rule there are exceptions, leaflets and their very versatile nature are a constant test to these means. Posters are a 20% VAT product as they are to be displayed publically or kept, leaflets distributed by hand are Zero-rated. What makes a poster, a poster and a leaflet, a leaflet? This can be defined by the following: There must be a significant amount of text on at least one side of the leaflet to ensure that this is being used for hand-held reading purposes as opposed to wall mounting. The leaflet must also have a finished size no larger than A4.
Leaflets also become a 20% Rated product subject to the sight of artwork. If the artwork includes a redeemable offer or can be exchanged for any product or offer of monetary value then VAT must be paid.
Charities
Unfortunately it is a common myth that charities do not pay VAT, while they may be eligible for some tax reliefs they are still liable for numerous tax and VAT charges. If you are a charity and would like to claim back VAT paid, we recommend visiting the HMRC website.
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