When is VAT applicable for printed items?

VAT is paid on a wide range of everyday products however, the why and when its due is not very clear. There are three main categories for calculating; the standard at 20%, which is levied on most business related items and non essential items which are classed as luxury goods. A reduced rate of  5% is usually found on healthcare items and energy saving products such as home insulation, solar power etc. Zero Rated where it is not applicable, this includes a whole raft of items including some printed materials.

Zero Rated Items

Refers to items that do not require VAT as per ‘VAT Notice 701/10: zero-rating of books and other forms of printed matter’. This notice includes the following:

Pamphlets, Folded Leaflets, leaflets, flyers, newsletters, newspapers, brochures, booklets, books, magazines, catalogues, directories, manuals, sheet music, maps and timetables.

For more information click on the link  VAT Notice 701-10

20% VAT Rated Items

These are the items that require VAT to be paid at 20%. Generally speaking these are items that will be kept, displayed in public or used as a business amenity. This section includes the following items:

Stationery such as letterheads, compliment slips, business cards. As well as envelopes, invoices, labels, appointment cards, tickets, stickers, folders, forms, posters, postcards, invitations, certificates, calendars and coupons or vouchers.

The Exception That Makes The Rule

There are exceptions to most rules and in the printing world there are a few. If you want to order posters you will need to pay standard VAT at 20% due to them being displayed in public or being kept as a souvenir. However, if you are ordering a leaflet that is being distributed by hand, then they are zero-rated. So, what stops a leaflet being a poster or a poster being a leaflet? It is usually defined by the following: a significant amount of text on one side of the leaflet to ensure it is for hand-held reading purposes and not for mounting on walls. Also a printed leaflet size must be no larger than A4 to be classified as a leaflet.

You may be told your printing requires 20% VAT on sight of the artwork, this is in circumstances where it’s not clear. For example, if a brochure which has a form or notes pages within the design, ordinarily a brochure does not require VAT, but if it contains pages inside which are meant to be written onto and these are more than 25% of the pages, then VAT should be charged.

To make this more clear, an eight page brochure which had a single page as a form or notes page would not need vat, if two pages are forms then this would equal 25% so it would need VAT.

 

 

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