VAT On Printing: Your Cheat Sheet to VAT on Printed Items

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What is VAT, and is there VAT on Printed Items?

VAT on printed items is a minefield. There are lots of inconsistencies with VAT on Printing – luckily for you, we’ve saved you the time with our handy guide to VAT on Printed Items.

Value added tax, or VAT, is the tax you pay when you buy goods, or services. In the UK, the standard rate of VAT is 20%, and about half of common household purchases are taxable. Retail outlets have already had added VAT to the purchase price. Some items, such as food, newspapers, magazines and children’s clothes, and most recently sanitary products, are exempt.

Since the 70s, goods and services have VAT applied. Income tax and National Insurance, are some of the largest sources of government revenue for public spending.

Zero-Rated v. VAT Rated

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.

For example, books, and booklets, including literary works, reference books, directories and catalogues are exempt. Books of plans or drawings for industrial, architectural, engineering, commercial or similar purposes, completed stamp albums, and products that may be considered stationery items, for example, diaries and address books are not.

It can be complicated to understand, and when you’re working to a budget, it’s important to know what your costs are – unforeseen VAT ratings can add a substantial amount to your bill. That’s why we’ve put together the Galloways Guide to VAT on our most popular printed items. Simply check the list below, to see whether your print product is subject to VAT. If budget is key, the guide can also help you identify possible zero-rated product alternatives.

Zero-Rated VAT Rated
B
Booklets Business cards
Books
Brochures
C
Calendars
Certificates
Compliment slips
D
Directories Delivery notes
Diaries
E
Envelopes
Exhibition stands
F
Flyers*
I
Invitations
Invoices
J
Journals
L
Leaflets* Labels
Laminated products
Letterheads
M
Magazines
Manuals
Menus
O
Orders of Service Order books and forms
P
Pamphlets* Postcards
Price list Posters
Presentation folders
R
Roller banners
S
Sports programmes Stationery
T
Timetables
Travel brochures

*Flyers and leaflets must meet certain criteria to be zero-rated. They must be designed to be read hand-held (not posted on a wall), so there must be a significant amount of text on at least one side of the product. Printed products must also be no larger than A4, and printed on paper no thicker than 230gsm stock.

Are there exceptions to these rules?

Yes, there are exceptions, and these can render some printed products in the zero-rated list applicable for VAT.

VAT on printing is chargeable if your print product represents admission to an event. As well as if it is used to obtain a discount of goods or services. Print products that include the words “free admission with this leaflet”, or “20% off with this leaflet” are rated for VAT.

If your product is designed to be written on – such as postcards, certificates, and forms – then the space to be completed must cover at least 25% of the artwork. Anything less, and the product is zero-rated. This also applies to books that are designed to be written in or on, such as diaries and calendars. The space to be completed in products such as these is more than 25% of the available space, and therefore subject to VAT at the standard rate.

Dust covers, slip cases and presentation cases supplied with any zero-rated item is usually regarded as part of that item, and therefore considered zero-rated. Different rules apply to binders and folders, depending on whether they’re supplied with loose-leaf pages, or whether or not they are titled.

Full details of the criteria used to determine whether printed products are zero-rated or VAT rated is available from the HMRC’s website: VAT Notice 701/10, Zero rating books and printed matter. The site also provides detailed guidance on how VAT is applied to direct marketing, post and delivery services, which you might find of interest.

However, that’s a lot of information to navigate, and we know it’s important to get it right. We also know that we can help you negotiate the VAT rules, or even let us offer our advice.

Call the team at Galloways today on 01625 870000, and one of our friendly print specialists will be delighted to help you with your enquiry.

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