{"id":17,"date":"2008-08-27T11:07:09","date_gmt":"2008-08-27T10:07:09","guid":{"rendered":"http:\/\/www.stationery-direct.co.uk\/blog\/?p=17"},"modified":"2021-01-19T13:34:12","modified_gmt":"2021-01-19T13:34:12","slug":"vat-on-printed-products","status":"publish","type":"post","link":"https:\/\/www.stationery-direct.co.uk\/blog\/vat-on-printed-products\/","title":{"rendered":"VAT on printed products"},"content":{"rendered":"

VAT on printed products explained.<\/strong><\/p>\n

VAT on printed items can be\u00a0difficult to understand, even for us! Mainly because what is printed on the product in question can determine if the product is\u00a0standard rated (vatable)\u00a0or zero rated (VAT exempt).<\/p>\n

As an example, leaflets are zero rated as standard, however, if your leaflet was to offer discount on a product or service then this is now classed as a voucher and becomes standard rated.<\/p>\n

We have shown some information below provided by HM Revenue & Customs,\u00a0it is also available\u00a0on their website but\u00a0is so difficult to find, hence, we decided to post it here for all to see. The information is VERY<\/span> detailed and far more than most people need, however, we decided to post the\u00a0full article to cover every eventuality.<\/p>\n

<\/p>\n

<\/strong>\u00a0<\/p>\n

1. What this notice is about
\n<\/strong>It explains the nature of, and the circumstances when you can zero-rate books (the items listed in Group 3 of schedule 8 of the Value Added Tax Act 1994 reproduced in paragraph 1.2).<\/p>\n

\u00a0<\/p>\n

1.1 What\u2019s changed?
\n<\/strong>The notice has been rewritten to improve readability. However, we have taken the opportunity to update the material and clarify certain matters on which we have received queries since the publication of the last edition. We have:<\/p>\n

(a)<\/strong> removed all reference to \u201cprinted and similar matter\u201d (including the title of the notice which is now Zero-rating of Books etc) as this phrase does not appear in the VAT Act 1994 and we have received indications that there has been general misunderstanding of its meaning.
\n(b)<\/strong> updated our policy on leaflets to take account of recent developments in the printing industry \u2013 see paragraph 3.3.
\n(c)<\/strong> made it clear that the 25% test for items with areas for completion, detachment or return is not a rigid guideline – see paragraph 3.4.
\n(d)<\/strong> shown the special rules for charities in paragraphs 4.6, and 6.6.
\n(e)<\/strong> included for the first time the liability of supplies by libraries – see paragraph 5.3.
\n(f)<\/strong> updated our guidance on single and multiple supplies and the package test to take account of the decision in the European Court of Justice case of Card Protection Plan – see section 6. In particular we have included additional guidance on the operation of the package test when supplies of items printed on paper and card are supplied to charities – see paragraph 6.6.
\n(g)<\/strong> clarified the distinction between supplies of services where zero-rated goods are incidental products, and those supplies of services which result in the production of zero-rated goods – see section 7.<\/p>\n

<\/strong>\u00a0<\/p>\n

1.2 What law covers this notice?
\n<\/strong>The Value Added Tax Act 1994, section 30 provides for the zero-rating of goods listed in Schedule 8 of the Act.<\/p>\n

Schedule 8, Group 3 sets out which books, etc which may be zero-rated as follows:<\/p>\n

Group 3 – Books, etc.<\/strong><\/p>\n

1.<\/strong> Books, booklets, brochures, pamphlets and leaflets.
\n2.<\/strong> Newspapers, journals and periodicals.
\n3.<\/strong> Children’s picture books and painting books.
\n4.<\/strong> Music (printed, duplicated or manuscript).
\n5.<\/strong> Maps, charts and topographical plans.
\n6.<\/strong> Covers, cases and other articles supplied with items 1 to 5 and not separately accounted for.<\/p>\n

Note: Items 1 to 6 \u2013<\/strong><\/p>\n

(a)<\/strong> do not include plans or drawings for industrial, architectural, engineering, commercial or similar purposes; but
\n(b)<\/strong> include the supply of the services described in paragraph 1(1) of Schedule 4 in respect of goods comprised in the items.<\/p>\n

The effect of paragraph 1(1) of Schedule 4 is explained in paragraph 5.3.<\/p>\n

<\/strong>\u00a0<\/p>\n

2. The format of the Group 3 items
\n<\/strong>The words in Group 3 are used in their ordinary, everyday sense. This means they are restricted to goods produced on paper and similar materials such as card (but see paragraph 3.7). Most items qualifying for the zero-rating will be products of the printing industry (including items printed in Braille), but goods which are photocopied, typed or hand-written will, in some cases, also qualify.<\/p>\n

Goods containing text in other formats such as audio or video cassettes or CD Rom are standard-rated. This includes the storage and distribution of text by fax, e-mail, microfiche, or any similar process. Transcripts or print-outs made of such information are zero-rated if they are supplied in the form of books, booklets, brochures, pamphlets or leaflets as defined in section 3.<\/p>\n

The supply of text by electronic transmission, via the internet, or similar means is also standard-rated. Such supplies are of services, not of goods, and different VAT rules will apply to them.<\/p>\n

<\/strong>\u00a0<\/p>\n

3. Meaning of the Group 3 items<\/strong>
\nThe meaning of the individual items is explained in detail below. Whether a particular item falls within those meanings depends mainly on its physical characteristics and function but also, to a lesser extent, on its content.<\/p>\n

<\/strong>\u00a0<\/p>\n

3.1 Books and Booklets<\/strong>
\nThese normally consist of text or illustrations, bound in a cover stiffer than their pages. They may be printed in any language or characters (including Braille or shorthand), photocopied, typed or hand-written, so long as they are found in book or booklet form.<\/p>\n

Supplies of any of the following are zero-rated:<\/strong><\/p>\n

\u2022 <\/strong>literary works;
\n\u2022<\/strong> reference books;
\n\u2022<\/strong> directories and catalogues;
\n\u2022<\/strong> antique books;
\n\u2022<\/strong> collections of letters or documents permanently bound in covers;
\n\u2022<\/strong> loose-leaf books, manuals or instructions, whether complete with their binder or not; and
\n\u2022<\/strong> amendments to zero-rated loose-leaf books, even if issued separately.<\/p>\n

School work books and other educational texts in question and answer format, are zero-rated because the spaces provided for the insertion of answers are incidental to the essential character of the book or booklet. The same applies to exam papers in question and answer format provided they qualify as books, booklets, brochures, pamphlets or leaflets.<\/p>\n

But supplies of the following are standard-rated:<\/strong><\/p>\n

\u2022 <\/strong>books of plans or drawings for industrial, architectural, engineering, commercial or similar purposes;
\n\u2022<\/strong> 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;
\n\u2022<\/strong> completed stamp albums; and
\n\u2022<\/strong> products that are essentially stationery items, for example, diaries and address books.<\/p>\n

<\/strong>\u00a0<\/p>\n

3.2 Brochures and Pamphlets<\/strong>
\nThese are not defined in law and whether a particular product qualifies as a brochure or pamphlet is a matter of fact and impression.<\/p>\n

Brochures usually consist of several sheets of reading matter fastened or folded together, which are not necessarily bound in covers. They usually contain advertising material in the form of text or illustrations. Pamphlets are similar, but are usually comprised of material of a political, social or intellectual nature.<\/p>\n

Single sheet brochures and “Wallet” type brochures designed with a flap may be zero-rated provided they:<\/p>\n

\u2022 <\/strong>convey information; and
\n\u2022<\/strong> contain a substantial amount of text, with some indication of contents or of the issuing organisation; and
\n\u2022<\/strong> are not primarily designed to hold other items; and
\n\u2022<\/strong> are supplied complete.<\/p>\n

\u00a0<\/p>\n

3.3 Leaflets
\n<\/strong>These are also not defined in law and again whether a particular product qualifies as a leaflet is a matter of fact and impression. Leaflets normally:<\/p>\n

\u2022<\/strong> consist of a single sheet of paper not greater than international standard A4 in size (larger publications up to A2 size can be zero-rated provided that they are printed on both sides, folded down to A4 size or smaller and meet the other conditions);
\n\u2022<\/strong> are intended to be held in the hand for reading by individuals (rather than for hanging up for general display);
\n\u2022<\/strong> convey information;
\n\u2022<\/strong> are complete (and not a part work);
\n\u2022<\/strong> are supplied in sufficient quantity (at least 50 copies) to permit general distribution;
\n\u2022<\/strong> are printed on limp paper; and
\n\u2022<\/strong> will either be of an ephemeral nature (designed to be read a few times and then thrown away) or be designed to accompany some other product or service, for example an instruction leaflet.<\/p>\n

Items printed on stiff paper and card are not automatically excluded from the definition of leaflets. However we do regard the use of stiff paper and card as an indicator that the items have a function which would exclude them. For example if the item\u2019s main function were designed to be kept or used for a specific purpose in its own right, rather as ancillary to another supply, it would not be a leaflet.<\/p>\n

Examples of items that would not be leaflets would be those designed to be used for any of the following:<\/p>\n

\u2022 <\/strong>as a calendar;
\n\u2022<\/strong> to obtain admission to premises;
\n\u2022<\/strong> to obtain a discount on goods or services;
\n\u2022<\/strong> as reference material; or
\n\u2022<\/strong> for completion or return (see paragraph 3.4).<\/p>\n

We consider that items printed on laminated paper are designed to be kept and therefore not leaflets. On the other hand, orders of service are not normally designed to be kept and may be zero-rated.<\/p>\n

\u00a0<\/p>\n

3.4 Items with areas for completion
\n<\/strong>Items which might otherwise be considered to be leaflets, brochures and pamphlets may not be zero-rated if they are primarily intended for completion or detachment. This distinguishes brochures, pamphlets and leaflets from standard-rated forms.<\/p>\n

We accept that items are not primarily intended for completion or detachment if 25% or less of their total area consists of:<\/p>\n

\u2022<\/strong> areas which are blank and available for completion; or
\n\u2022<\/strong> parts to be detached and returned.<\/p>\n

Where there is both an area for completion and a part to be detached and returned, then the two together must not exceed 25% of the total area of the publication. If you have items with areas for completion or detachment which does exceed 25%, but you consider they are nevertheless not primarily forms or other stationery, you should obtain a written ruling from our National Advice Service before zero-rating them.<\/p>\n

Whatever the area for completion, a publication which is designed to be returned whole after completion is always standard-rated.<\/p>\n

\u00a0<\/p>\n

3.5 Newspapers<\/strong>
\nNewspapers are issued at least once a week in a continuous series under the same title. Each issue is usually dated and\/or serially numbered. They usually consist of several large sheets folded rather than bound together, and contain information about current events of local, national or international interest.<\/p>\n

Publications which do not contain a substantial amount of news are not newspapers.<\/p>\n

Many newspapers also carry items such as readers\u2019 letters, sports news, the weather forecast, crosswords and features (including feature supplements) on fashion, gardening, etc., or more specialised topics.<\/p>\n

\u00a0<\/p>\n

3.6 Journals and Periodicals
\n<\/strong>These are magazines issued in a series at regular intervals, more frequently than once a year, either in newspaper format or as paper-bound publications. They may contain information of a specialised nature (for example legal, medical, financial, commercial, fashion or sporting) or be of more general interest. They are normally a mixture of articles and stories with the content changed for each edition. Although they consist essentially of reading matter, they may also consist mainly of illustrations or advertising matter.<\/p>\n

\u2018Poster-magazines\u2019, which have some textual material on one side and a related picture capable of being used as a poster on the other side and which are folded into a magazine format are zero-rated as periodicals, provided they are issued at regular intervals.<\/p>\n

Publications whose main purpose is to promote your own products or services are not journals or periodicals, even if they are published regularly. If you supply such publications, you can still zero-rate them if they fall within one of the zero-rated categories, such as brochures.<\/p>\n

\u00a0<\/p>\n

3.7 Children\u2019s Picture Books
\n<\/strong>These are zero-rated, whether they are printed on paper, plastic or textiles, such as children\u2019s rag books, unless the article is essentially a toy.<\/p>\n

Examples of articles which are standard-rated as toys include:<\/p>\n

\u2022<\/strong> books consisting wholly or mainly of pictures of models for cutting out – but books with printed text directly related to the material for cutting out covering at least 25% of the pages can be zero-rated. (Pages of assembly instructions should not be included as printed text for the purpose of determining eligibility for zero-rating); and
\n\u2022<\/strong> items where the “pages” are boards for games.<\/p>\n

\u00a0<\/p>\n

3.8 Children\u2019s Painting Books<\/strong>
\nSupplies of the following are zero-rated:<\/p>\n

\u2022<\/strong> children\u2019s painting and drawing books with sample pictures for copying, or outlines of pictures for colouring, painting or drawing;
\n\u2022<\/strong> similar books with \u2018invisible\u2019 outlines to colour which can be made visible by rubbing with a pencil or applying water with a paint brush;
\n\u2022<\/strong> painting books in which the small amounts of water colour required for colouring are contained in the book (for example, in the form of a palette); and
\n\u2022<\/strong> activity books which combine pages of colouring with pages of puzzles, quizzes and the like.<\/p>\n

\u00a0<\/p>\n

3.9 Music
\n<\/strong>Printed, duplicated or manuscript music of all kinds is zero-rated. It may be:<\/p>\n

\u2022<\/strong> instrumental or vocal;
\n\u2022<\/strong> printed or hand-written;
\n\u2022<\/strong> bound or on loose sheets;
\n\u2022<\/strong> illustrated or not; or
\n\u2022<\/strong> in any system of notation, including numerical symbols or Braille.<\/p>\n

Music rolls and blank music manuscript are standard-rated. A piece of music commissioned from a composer is standard-rated (see paragraph 7.2).<\/p>\n

\u00a0<\/p>\n

3.10 Maps, Charts and Topographical Plans
\n<\/strong>Supplies of all printed maps and charts designed to represent the natural or artificial features of countries, towns, seas, the heavens, etc are zero-rated. They can be printed on paper or other material (such as cloth) and in the form of single or folded sheets or a collection of such sheets bound together in book form (for example, an atlas).<\/p>\n

But supplies of any of these are standard-rated:<\/p>\n

\u2022 <\/strong>plans or drawings for industrial, architectural, engineering, commercial or similar purposes, in any format;
\n\u2022<\/strong> framed maps whose primary purpose is decorative;
\n\u2022<\/strong> posters;
\n\u2022<\/strong> pictorial wall charts;
\n\u2022<\/strong> aerial photographs;
\n\u2022<\/strong> globes, three dimensional models and similar articles; or
\n\u2022<\/strong> decorative maps printed or woven into textile articles such as scarves, handkerchiefs, tea-towels, tapestries, rugs.<\/p>\n

\u00a0<\/p>\n

4. Items not included within any of the Group 3 items:<\/strong><\/p>\n

\u00a0<\/p>\n

4.1 Posters<\/strong>
\nSheets intended for public display are standard-rated. For \u2018Poster-magazines\u2019, see paragraph 3.6.<\/p>\n

\u00a0<\/p>\n

4.2 Stationery<\/strong>
\nStationery items such as account books and exercise books are standard-rated. Some items which are standard-rated stationery when new and unused can be zero-rated if sold after they have been completed, provided that they then have the physical characteristics of a book or other zero-rated item. Examples are completed diaries or ships\u2019 logs, but not completed stamp albums.<\/p>\n

\u00a0<\/p>\n

4.3 Letters<\/strong>
\nIndividual manuscript or typed letters are standard-rated, as are collections of such letters if they are unbound or loosely bound. Permanently bound collections of letters are zero-rated.
\nIf a \u2018stock\u2019 or basic letter is supplied with an individual name or address of the recipient added (by whatever means) that supply is standard-rated. Uncompleted \u2018stock\u2019 or basic letters may qualify as leaflets (paragraph 3.3), if the portion for completion consists of no more than the recipient\u2019s name and address, a reference number and a signature.<\/p>\n

\u00a0<\/p>\n

4.4 Incomplete Publications<\/strong>
\nParts of books, unbound pages and separate illustrations are standard-rated.<\/p>\n

By concession, the following are zero-rated:<\/p>\n

\u2022 <\/strong>Part work publications designed to build up into a zero-rated book. Once a complete book has been supplied, amendments to it may also be zero-rated.
\n\u2022<\/strong> Card based continuity series publications, even though not bound, but stored in their container will for, VAT purposes, be treated as a book.<\/p>\n

\u00a0<\/p>\n

4.5 Photocopies
\n<\/strong>Photocopies of zero-rated items are always standard-rated unless the copies can be properly described as books, booklets, brochures, pamphlets, leaflets etc, and meet all the criteria for such items in the relevant receding paragraphs. A bundle of photocopies would not constitute a book unless it included copies of all the pages of a book and was in a permanent binding. Photocopies of parts of books, extracts from periodicals etc cannot be zero-rated unless they are complete in themselves and have the characteristics of zero-rated items.<\/p>\n

If you provide \u2018instant\u2019 photocopying or duplicating services and you cannot determine the VAT liability of the copies which you supply, you should charge and account for VAT at the standard rate.<\/p>\n

\u00a0<\/p>\n

4.6 Supplies to Charities<\/strong>
\nCertain printed items that are not within the group 3 zero-rating and are therefore usually standard-rated, may be zero-rated when supplied to charities for use in connection with collecting monetary donations.<\/p>\n

\u00a0<\/p>\n

5. Related supplies:<\/strong><\/p>\n

<\/strong>\u00a0<\/p>\n

5.1 Incidental articles supplied with zero-rated items
\n<\/strong>Minor accessories for example dust covers, clasps, book marks, slip cases and presentation cases, supplied with any zero-rated items, are usually regarded as forming part of the zero-rated item (but see section 6).<\/p>\n

<\/strong>\u00a0<\/p>\n

5.2 Binders and Folders<\/strong>
\nRing-binders and similar binders supplied on their own are zero-rated if they are designed to contain a loose-leaf book, provided the exact title of that book is printed on the outside. A company name alone is not enough for zero-rating. A binder supplied with loose-leaf pages to make a book is treated as part of the zero-rated supply whether titled or not. All other binders or files for general or office use are standard-rated. This includes binders for part works, journals or periodicals (whether specifically titled or not).<\/p>\n

Most folders and wallets are standard-rated but if they convey information themselves they may qualify as brochures (see paragraph 3.2).<\/p>\n

<\/strong>\u00a0<\/p>\n

5.3 Loans, Hire and Shares<\/strong>
\nIf you lend or hire out an article which is zero-rated under the rules explained in this notice, or sell a share or part interest in such an article, your supply is always zero-rated. Libraries which charge for the loan of books will therefore be making zero-rated supplies. This will also apply to reference libraries which charge for the use of their books on their own premises.<\/p>\n

Please note that libraries which charge for use of a number of different facilities must consider section 6.<\/p>\n

\u00a0<\/p>\n

5.4 Book Tokens<\/strong>
\nIf you\u2026<\/p>\n

\u2022<\/strong> print book tokens for someone then your supply is standard-rated
\n\u2022<\/strong> sell a book token to the general public for its face value or less then no VAT is due
\n\u2022<\/strong> sell a book token to the general public for more than its face value you must account for VAT on the difference between your selling price and its face value
\n\u2022<\/strong> make a separate charge for a greetings card that charge is standard-rated<\/p>\n

\u00a0<\/p>\n

5.5 Small order surcharges
\n<\/strong>If you impose a surcharge for handling a small order, which increases the unit price of the goods, it is part of the price of the goods and is zero-rated if the goods are zero-rated.<\/p>\n

\u00a0<\/p>\n

5.6 Postage packing and delivery charges<\/strong>
\nGuidance is given in Notice 700\/24 Postage and delivery charges.<\/p>\n

\u00a0<\/p>\n

5.7 Subsidy or vanity publishing
\n<\/strong>Subsidy or vanity publishing occurs when an author who is unable to have work published pays a publisher to do so. If the publisher produces books which are all delivered to the author, the payment by the author is a consideration for a supply of books and is zero-rated. If the bulk of the books remain with the publisher, payment by the author is partly for the supply of books (zero-rated) and partly for publishing services (standard-rated).<\/p>\n

\u00a0<\/p>\n

6. Single and multiple supplies:<\/strong><\/p>\n

<\/strong>\u00a0<\/p>\n

6.1 Transactions with more than one element<\/strong>
\nWhen you supply the same person at the same time with a number of different goods or services or both, a transaction with more than one element occurs. You may, or may not, charge a single inclusive price for the transaction. If the individual elements are all liable to VAT at the same rate, you can calculate the tax that is due in the normal way. If the individual supplies are not liable to VAT at the same rate, you have to decide whether you are making a single supply or a multiple supply.<\/p>\n

There are exceptions to the normal rule:<\/p>\n

\u2022<\/strong> for packages consisting entirely of items printed on paper or card – see paragraphs 6.5 and 6.6.
\n\u2022<\/strong> for certain cover mounted items on magazines – see paragraph 6.7.<\/p>\n

\u00a0<\/p>\n

6.2 Distinguishing between single and multiple supplies<\/strong>
\nWhen you supply books or magazines etc packaged with another item, you must determine whether they constitute single or multiple supplies, in line with the principles established in the European Court of Justice judgment in Card Protection Plan (CPP).<\/p>\n

You make a single supply when one element of the supply is the principal element to which all the other elements are ancillary, integral or incidental. An ancillary element does not constitute, for the customer, an aim in itself, but is a means of better enjoying the principal service (or good) supplied. Integral elements are elements that are essential, necessary or incidental to the main supply. An incidental element is something that naturally accompanies the main supply, such as packaging.<\/p>\n

General indicators of a single supply, (although they are not conclusive), are:<\/p>\n

\u2022<\/strong> Single price.
\n\u2022<\/strong> Advertised as a package.
\n\u2022<\/strong> Components not available separately.
\n\u2022<\/strong> Goods physically packaged together.
\n\u2022<\/strong> Customer perceives that what they are getting is a single supply not a package (e.g. a tailor made suit not cloth and tailoring services).<\/p>\n

You make a multiple supply if one or more element is distinct and independent. The following points may indicate that more than one supply is taking place:<\/p>\n

\u2022<\/strong> Separate pricing\/invoicing.
\n\u2022<\/strong> Items available separately.
\n\u2022<\/strong> Time differential between parts of the supply.
\n\u2022<\/strong> Elements of the supply are not inter-dependent\/connected.<\/p>\n

\u00a0<\/p>\n

6.3 The three possible liability outcomes<\/strong>
\nThere are three possible liability outcomes if zero-rated printed matter is supplied with other items:<\/p>\n

\u2022<\/strong> The standard-rated item may be ancillary to, or an integral part of, the supply of zero-rated printed matter. The resulting supply is a single, zero-rated supply. (However, covers, cases and similar articles not separately accounted for are already zero-rated under Item 6 of Group 3, Schedule 8 of the VAT Act 1994.)
\n\u2022<\/strong> The zero-rated printed matter may be ancillary to, or an integral part of, the supply of the standard-rated item. For example, an instruction booklet provided with a new washing machine. The resulting supply is a single, standard-rated supply.
\n\u2022<\/strong> There may be a multiple supply, where two or more items are distinct and independent. If the items are sold for a single price and are liable to different rates of VAT you must make an apportionment, (see VAT Notice 700).<\/p>\n

\u00a0<\/p>\n

6.4 Common examples and problem areas<\/strong>
\nSometimes it is easy to identify a multiple supply, as items supplied together can be used independently of each other. Common examples are books issued with films or tapes and children\u2019s colouring books issued with felt-tip pens. It is quite possible to use the film or tape independently of the book and, indeed, they need separate equipment to use them. Similarly, a child can use a felt-tip pen on any paper of his\/her choice – it is sold with a colouring book as a marketing device.<\/p>\n

One particular area that causes problems is children\u2019s activity packs. These may contain zero-rated books or booklets and standard-rated items such as jigsaw puzzles or toys. You need to decide whether the omission of any one component part would diminish the pack as a whole. It is not possible to give overall guidelines on these activity packs as each one is different, and must be judged on its own merits.<\/p>\n

\u00a0<\/p>\n

6.5 Packages consisting entirely of items printed on paper or card (The Package Test)
\n<\/strong>Where you make a multiple supply of a package consisting entirely of items printed on paper or card, you have a choice. You can account for VAT by apportionment between the standard-rated and zero-rated elements or you can apply the package test.<\/p>\n

For this purpose, a package is a collection of items printed on paper or card usually enclosed in some sort of wrapper. The articles must physically form a package and have a common link in that they are intended to be used together, examples are:<\/p>\n

\u2022<\/strong> Packages contained in an outer polythene or paper envelope; for example, a package sent to a shareholder which includes company reports, circulars, a proxy voting form and a reply-paid envelope.
\n\u2022<\/strong> Cardboard folders with pockets into which are inserted a variety of forms, leaflets, etc.
\n\u2022<\/strong> Advertising packages often from financial institutions.<\/p>\n

The package test may reduce your tax burden and be simpler than the apportionment described above. It operates as follows:<\/p>\n

\u2022<\/strong> if the package contains more zero-rated than standard-rated items, the package as a whole can be zero-rated;
\n\u2022<\/strong> if there are more standard-rated items, the package as a whole is standard-rated; and
\n\u2022<\/strong> where there are equal numbers of zero-rated and standard-rated items, the liability of the package is decided by the costs of the goods. If the zero-rated elements of the package cost more, the whole package is zero-rated and vice versa.<\/p>\n

In the unlikely event that the standard and zero-rated elements cost exactly the same amount, apportionment should be applied.<\/p>\n

Note:<\/strong><\/p>\n

(a)<\/strong> The outer envelope in which the package items are enclosed is not taken into account in the count, but a reply-paid envelope counts as a standard-rated item.
\n(b)<\/strong> If any item in the package is not printed on paper or card the package test cannot be applied.<\/p>\n

\u00a0<\/p>\n

6.6 The package test for charities<\/strong>
\nFrom the date of this notice (1st day of the month), if you supply a package to a charity you can treat some items connected with collecting monetary donations as zero-rated for the purposes of the package test. The items must meet the criteria set out in Notice 701\/58 Charity advertising and goods connected with collecting donations.<\/p>\n

Item…<\/p>\n

\u2022 <\/strong>Letter appealing for donations = Zero-rated
\n\u2022 <\/strong>Printed envelopes for use with appeal letters = Zero-rated
\n\u2022 <\/strong>Money collecting envelopes = Zero-rated
\n\u2022 <\/strong>Stickers = Standard-rated for the package test
\n\u2022 <\/strong>Money collecting boxes made of card = Zero-rated
\n\u2022 <\/strong>Any item not made of paper or card = Package test cannot be used<\/p>\n

\u00a0<\/p>\n

6.7 Promotional items in Magazines
\n<\/strong>If you link a cover-mounted item such as a sachet of perfume or a CD to a magazine, you can treat it as zero-rated if the following conditions are met:<\/p>\n

\u2022<\/strong> you do not make a separate charge for it; and
\n\u2022<\/strong> issues with cover mounted items are sold at the same price as those that do not; and
\n\u2022<\/strong> the cost to you of the cover mounted item or items included in any individual issue does not exceed:<\/p>\n

–<\/strong> 20% of the total cost to you of the combined supply (excluding VAT); and
\n–<\/strong> \u00a31 (excluding VAT).<\/p>\n

This linking of goods is normally done by the publisher, but can take place at any point in the distribution chain (for example, distributor, retailer). If at the point of linkage the supply satisfies the terms of this concession, it becomes a single zero-rated supply and will continue to be a single supply throughout the chain. If the supply does not satisfy the terms of the concession, you will have to consider whether the supply is a single or multiple supply under the normal rules explained above.<\/p>\n

\u00a0<\/p>\n

6.8 Where can I find further information about this?<\/strong>
\nIn VAT Information Sheet 2\/01 (July 2001) – “Single or Multiple Supplies – How to Decide”.<\/p>\n

\u00a0<\/p>\n

7. Production of zero-rated goods:<\/strong><\/p>\n

\u00a0<\/p>\n

7.1 Nature of the service<\/strong>
\nSome contracts to supply services involve, to a greater or lesser extent, the production of goods zero-rated under group 3. If you supply such services, you should first consider whether the your supply is of:<\/p>\n

(a)<\/strong> an original or specialist nature; or
\n(b)<\/strong> the production of goods (which will be more likely if you work in the printing industry)<\/p>\n

If\u2026<\/p>\n

\u2022 <\/strong>your services are of an original or specialist nature (see paragraph 7.2) then they are always standard-rated, as any goods produced are incidental to your services
\n\u2022 <\/strong>your service is of the production of goods then it will be zero-rated, where;
\n\u2022 <\/strong>your service has produced new goods and those goods are themselves zero-rated (see paragraph 7.3)<\/p>\n

\u00a0<\/p>\n

7.2 When do you supply services of an original or specialist nature?<\/strong>
\nWhen you supply a service such as:<\/p>\n

\u2022<\/strong> original writing or composition;
\n\u2022<\/strong> those involving a specialism such as translation, typing, shorthand transcription or transcription of musical scores, such services are standard-rated. When you also supply goods with those services as incidental products then you must standard-rate those goods even if they are zero-rated under group 3.<\/p>\n

Here are some examples:-<\/p>\n

\u2022<\/strong> a manuscript of a book supplied by an author;
\n\u2022<\/strong> a piece of music commissioned from a composer;
\n\u2022<\/strong> a report commissioned from a consultant, analyst or adviser;
\n\u2022<\/strong> a translation;
\n\u2022<\/strong> a shorthand transcription;
\n\u2022<\/strong> a typed manuscript; and
\n\u2022<\/strong> a musical score<\/p>\n

However, you may zero-rate any extra copies of such items provided:<\/p>\n

\u2022<\/strong> they are in a format which qualifies for zero- rating; and
\n\u2022<\/strong> they are supplied at a price which covers only the cost of producing the extra copies and a reasonable mark-up.<\/p>\n

\u00a0<\/p>\n

7.3 When is your service that of the production of new zero-rated goods?<\/strong>
\nNew goods are produced when the essential characteristics of the goods are altered.<\/p>\n

Note in particular in the following situations.<\/p>\n

\u00a0<\/p>\n

7.3.1 Preparatory or post-production work<\/strong>
\nWhere you have a contract to supply items that qualify for zero-rating, you may zero-rate any preparatory or post-production work (other than alterations) that you perform in conjunction with it. This applies whether or not you itemise the various processes on your tax invoice and charge for them separately, and even if you have employed sub-contractors.<\/p>\n

\u00a0<\/p>\n

7.3.2 Sub-Contract Work
\n<\/strong>As a sub-contractor you can only zero-rate work if you produce new zero-rated goods. If you do not produce zero-rated goods yourself, you cannot zero-rate your supply even if you know that the final product will be zero-rated. Therefore, if you provide typesetting only, your charge must be standard-rated. However, if you bind pages together to make a book (with cover) you are producing a zero-rated item and your supply can be zero-rated. There will be occasions when a sub-contractor will need to charge VAT for a contribution to the production process, although the main printer may zero rate the supply to the final customer.<\/p>\n

\u00a0<\/p>\n

7.3.3 Work on other people\u2019s goods<\/strong>
\nIf you apply a treatment or process to someone else\u2019s goods which produces new goods, the liability of your service follows that of the goods produced. If these new goods would qualify for zero-rating, then you have provided a zero-rated service. Any other service you provide is standard-rated including post-production alterations.<\/p>\n

For example, if you bind loose papers into a book, your service is zero-rated; but if you re-cover or otherwise repair an old volume your services are standard-rated.<\/p>\n

\u00a0<\/p>\n

8. Liability of some common items<\/strong>
\nIn the list below we give our views of the liability of items which are commonly the subject of queries about the zero-rating for books etc. However, you should not assume that an article is zero-rated under group 3 just
\nbecause it is not shown as standard-rated in the list, or determine liability by referring only to this list. You must satisfy yourself by reference to the general body of guidance in this notice that the product qualifies for zero-rating under one of the items of Group 3 (reproduced at paragraph 1.2).<\/p>\n

We have highlighted some of the most popular products.<\/p>\n

Acceptance Cards = Standard-rated
\nAccount Books = Standard-rated
\nAccounts (fully printed) = Zero-rated
\nAddress Books = Standard-rated
\nAdvertising Leaflets = Zero-rated
\n<\/strong>Agendas (fully printed) = Zero-rated
\nAlbums = Standard-rated
\nAlmanacs = Zero-rated
\nAmendment Slips = Standard-rated
\nAmendments (loose-leaf) = Zero-rated
\nAnnouncement Cards = Standard-rated
\nAnnuals = Zero-rated
\nAntique Books = Zero-rated
\nAntique Maps = Zero-rated
\nAppointment Cards = Standard-rated<\/strong>
\nArticles of Association (complete in booklet form) = Zero-rated
\nAstronomical Charts = Zero-rated
\nAtlases = Zero-rated
\nAutograph Albums (uncompleted) = Standard-rated
\nAutograph Books (completed) = Zero-rated<\/p>\n

Badges = Standard-rated
\nBags, Paper = Standard-rated
\nBallot Papers = Standard-rated
\nBankers\u2019 Drafts = Standard-rated
\nBibliographies = Zero-rated
\nBillheads = Standard-rated
\nBills of Lading = Standard-rated
\nBills of Quantity (blank) = Standard-rated
\nBills of Quantity (completed) = Zero-rated
\nBinders = Standard-rated (but see paragraph 5.2)
\nBingo Cards = Standard-rated
\nBiorhythm Charts = Standard-rated
\nBlotters = Standard-rated
\nBook Covers = Standard-rated
\nBook Marks = Standard-rated
\nBook Tokens = Standard-rated
\nBooklets = Zero-rated<\/strong>
\nBookmakers\u2019 Tickets = Standard-rated
\nBooks = Zero-rated<\/strong>
\nBrochures = Zero-rated
\n<\/strong>Bulletins = Zero-rated
\nBusiness Cards = Standard-rated<\/strong><\/p>\n

Calendars = Standard-rated<\/strong>
\nCatalogues = Zero-rated<\/strong>
\nCertificates = Standard-rated<\/strong>
\nCharts (geographical or topographical) = Zero-rated
\nCheques and Cheque Books = Standard-rated
\nCigarette Cards = Standard-rated
\nCirculars = Zero-rated
\nCloakroom Tickets = Standard-rated
\nColour Cards = Standard-rated
\nColouring Books (children\u2019s) = Zero-rated
\nComics = Zero-rated
\nCompany Accounts and Reports = Zero-rated
\nCompliment Slips =\u00a0Standard-rated
\nCopy Books (NCR Pads)\u00a0= Standard-rated<\/strong>
\nCorrespondence Cards = Standard-rated
\nCoupon Books =\u00a0Standard-rated
\nCoupons = Standard-rated
\nCredit Cards =\u00a0Standard-rated
\nCrossword Books =\u00a0Zero-rated<\/p>\n

Delivery Notes =\u00a0Standard-rated
\nDiaries (completed) = Zero-rated
\nDiaries (unused) = Standard-rated
\nDictionaries = Zero-rated
\nDirectories (completed) = Zero-rated
\nDividend Warrants = Standard-rated
\nDressmaking Patterns = Standard-rated<\/p>\n

Election Addresses = Zero-rated
\nEncyclopaedias = Zero-rated
\nEngineers\u2019 Plans = Standard-rated
\nEnvelopes = Standard-rated<\/strong>
\nExercise Books = Standard-rated
\nFashion Drawings = Standard-rated
\nFlash Cards = Standard-rated
\nFolders = Standard-rated<\/strong>
\nFootball Pool Coupons = Standard-rated
\nFootball Programmes = Zero-rated
\nForm Letters = Standard-rated (but see paragraph 4.3)
\nForms = Standard-rated<\/strong>
\nFramed Decorative Maps = Standard-rated<\/p>\n

Games = Standard-rated
\nGeological Maps =\u00a0Zero-rated
\nGlobes = Standard-rated
\nGraph Paper =\u00a0Standard-rated
\nGreetings Cards =\u00a0Standard-rated<\/strong><\/p>\n

Handbills = Zero-rated
\nHoliday and Tourist Guides =\u00a0Zero-rated
\nHydrographical Charts =\u00a0Zero-rated
\nHymn Books =\u00a0Zero-rated<\/p>\n

Index Cards =\u00a0Standard-rated
\nInlay Cards for Cassette, CD or DVD = Standard-rated
\nInstruction Manuals = Zero-rated
\nInsurance Cover Notes = Standard-rated
\nInvitation Cards = Standard-rated<\/strong>
\nInvoices = Standard-rated<\/p>\n

Journals = Zero-rated<\/p>\n

Labels = Standard-rated<\/strong>
\nLeaflets =\u00a0Zero-rated<\/strong>
\nLetter Headings = Standard-rated<\/strong>
\nLetters (handwritten) = Standard-rated
\nLog Books (blank) = Standard-rated
\nLoose Leaf Books = Zero-rated
\nLottery Tickets and Cards =\u00a0Standard-rated<\/p>\n

Magazines = Zero-rated<\/strong>
\nMail Order Catalogues = Zero-rated
\nManuals = Zero-rated
\nManuscript Paper =\u00a0Standard-rated
\nManuscripts = Standard-rated
\nMaps = Zero-rated
\nMedical Records =\u00a0Standard-rated
\nMembership Cards =\u00a0Standard-rated<\/strong>
\nMemo Pads = Standard-rated<\/strong>
\nMemorial Cards = Standard-rated
\nMenu Cards =\u00a0Standard-rated<\/strong>
\nMicrofiche = Standard-rated
\nMicrofilm = Standard-rated
\nMicroform Copies =\u00a0Standard-rated
\nMissals = Zero-rated
\nMonographs = Zero-rated
\nMusic = Zero-rated
\nMusic Rolls = Standard-rated
\nMusic Scores = Zero-rated<\/p>\n

Newspapers = Zero-rated<\/strong>
\nNote Books, Pads and Paper =\u00a0Standard-rated<\/p>\n

Order Books and Forms = Standard-rated<\/strong>
\nOrders of Service = Zero-rated<\/p>\n

Painting Books (children\u2019s) = Zero-rated
\nPamphlets = Zero-rated
\n<\/strong>Paper, Unprinted = Standard-rated
\nParts of Books (see paragraph 4.4) = Standard-rated
\nPattern Cards = Standard-rated
\nPeriodicals = Zero-rated
\nPhotograph Albums = Standard-rated
\nPhotographs = Standard-rated
\nPicture Books = Zero-rated
\nPlans = Standard-rated (but see paragraph 3.10)
\nPlaying Cards = Standard-rated
\nPoll Cards = Standard-rated
\nPools Coupons = Standard-rated
\nPostcards = Standard-rated<\/strong>
\nPoster Magazines (see paragraph 3.6) = Zero-rated
\nPosters = Standard-rated
\n<\/strong>Prayer Books = Zero-rated
\nPrice Cards and Tags = Standard-rated
\nPrice Lists (fully printed leaflets or brochures) = Zero-rated
\n<\/strong>Printed Pictures =\u00a0Standard-rated
\nProgrammes = Zero-rated<\/strong><\/p>\n

Questionnaires = Standard-rated<\/strong><\/p>\n

Rag Books (children\u2019s) = Zero-rated
\nReceipt Books and Forms\u00a0= Standard-rated
\n<\/strong>Recipe Books = Zero-rated
\nRecord Books = Standard-rated
\nRecord Labels = Standard-rated
\nRecord Sleeves = Standard-rated
\nRegisters = Standard-rated
\nRent Books = Standard-rated
\nReply-Paid Coupons and Envelopes = Standard-rated
\nReproductions of Paintings = Standard-rated
\nRoad Maps = Zero-rated<\/p>\n

Score Cards = Standard-rated
\nScrap Books (blank) = Standard-rated
\nScrap Books (completed) = Zero-rated
\nScrolls (hand-written) =\u00a0Standard-rated
\nSeals = Standard-rated
\nShare Certificates = Standard-rated
\nShips\u2019 Logs (completed) = Zero-rated
\nSports Programmes = Zero-rated
\nStaff Journals = Zero-rated
\nStamp Albums (whether completed or not) = Standard-rated
\nStationery = Standard-rated<\/strong>
\nStationery Books = Standard-rated
\nStickers = Standard-rated<\/strong>
\nSwatch Books = Standard-rated
\nSwatch Cards = Standard-rated
\nSweepstake Tickets = Standard-rated<\/p>\n

Tags = Standard-rated
\nTemperature Charts = Standard-rated
\nText Books = Zero-rated
\nTheses = Zero-rated
\nTickets = Standard-rated<\/strong>
\nTime Cards and Sheets = Standard-rated
\nTimetables (in book or leaflet form) = Zero-rated
\n<\/strong>Tokens = Standard-rated (but see paragraph 5.4)
\nTopographical Plans =\u00a0Zero-rated
\nToys = Standard-rated
\nTracts = Zero-rated
\nTrade Catalogues = Zero-rated
\nTrade Directories = Zero-rated
\nTranscripts = Standard-rated
\nTransfers = Standard-rated
\nTransparencies = Standard-rated
\nTravel Brochures = Zero-rated<\/p>\n

Visiting Cards = Standard-rated
\nVouchers = Standard-rated<\/strong><\/p>\n

Wall Charts = Standard-rated
\nWaste Paper = Standard-rated
\nWills = Standard-rated
\nWinding Cards = Standard-rated
\nWrapping Paper = Standard-rated
\nWreath Cards = Standard-rated<\/p>\n

\u00a0<\/p>\n

At time of posting (27\/8\/2008) the above is correct, any future updates or amendments\u00a0will be found here: http:\/\/www.hmrc.gov.uk<\/a><\/p>\n

\u00a0<\/p>\n

\u00a9 Crown Copyright<\/p>\n

\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

VAT on printed products explained. VAT on printed items can be\u00a0difficult to understand, even for us! Mainly because what is printed on the product in question can determine if the product is\u00a0standard rated (vatable)\u00a0or zero rated (VAT exempt). As an example, leaflets are zero rated as standard, however, if your leaflet was to offer discount […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-17","post","type-post","status-publish","format-standard","hentry","category-print-and-design"],"_links":{"self":[{"href":"https:\/\/www.stationery-direct.co.uk\/blog\/wp-json\/wp\/v2\/posts\/17","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.stationery-direct.co.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.stationery-direct.co.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.stationery-direct.co.uk\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.stationery-direct.co.uk\/blog\/wp-json\/wp\/v2\/comments?post=17"}],"version-history":[{"count":1,"href":"https:\/\/www.stationery-direct.co.uk\/blog\/wp-json\/wp\/v2\/posts\/17\/revisions"}],"predecessor-version":[{"id":2048,"href":"https:\/\/www.stationery-direct.co.uk\/blog\/wp-json\/wp\/v2\/posts\/17\/revisions\/2048"}],"wp:attachment":[{"href":"https:\/\/www.stationery-direct.co.uk\/blog\/wp-json\/wp\/v2\/media?parent=17"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.stationery-direct.co.uk\/blog\/wp-json\/wp\/v2\/categories?post=17"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.stationery-direct.co.uk\/blog\/wp-json\/wp\/v2\/tags?post=17"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}