One of the questions we get asked most frequently with regards to prices are in connection to Value Added Tax (VAT). The current rules regarding VAT on printed materials are perhaps a little difficult to decipher and so here is our guide to understanding if your print will be subject to VAT.
What is VAT?
Introduced in 1973 VAT is a tax on goods and services and is the UK Government’s third highest source of revenue. There are three levels of VAT – Standard (20%), Reduced (5%) and Zero (0%). With regards to print we are only concerned with Standard and Zero.
Several items that you may require to be printed will be subject to VAT. These include items of office stationery such as letter headings, compliments slips and business cards, and extend to posters, invitations, certificates, postcards and many other items.
As a rough (actually very rough) rule of thumb if the item is designed to be written on (such as a form or a questionnaire), or is used in the course of a business transaction (i.e. a ticket, labels or coupons) then VAT will be applied to the product. Most printers will quote prices excluding VAT and so when comparing quotes always remember to add the additional 20% to the quoted price when necessary.
As well as the actual printed products certain other services that you might ask your printer to undertake are also VATable. If you ask someone to scan an image, duplicate photographs, create design or photocopy for you these all fall under the VAT umbrella.
But not all print is subject to 20% VAT. Many common items produced by printers are exempt from VAT. Again as a rough guide these can be classed as printed items that are designed to be read for the purposes of advertising a business, events or goods or items that are designed to be educational or informative and handheld. Items that don’t get VAT added therefore include books, booklets and pamphlets, magazines, leaflets, newspapers, price lists (unless they contain an order form) and timetables.
Care needs to be taken when applying zero rating to flyers and leaflets as they need to meet certain criteria. For example at least one side of the leaflet must contain a significant amount of text and the item must be printed on paper no heavier than 230gsm (items not fulfilling this criteria are considered as having been designed for wall-mounted or hanging and are therefore subject to standard rate VAT). In addition to the above the flyer or leaflet must be A4 or smaller and a self-contained item. Only if all of these criteria are met can the product be classed as zero rated.
A non-exhaustive list of items that are, and are not, subject to standard rate VAT is below:
Zero Rated Standard
- Books – Business Cards
- Brochures – Calendars
- Catalogues – Certificates
- Leaflets – Compliments Slips
- Magazines – Delivery Notes
- Manuals – Diaries
- Maps – Envelopes
- Sheet Music – Folders
- Newsletters – Forms
- Newspapers – Invitations
- Price Lists – Invoices
- Timetables – Labels / Letterheads / Postcards / Stationery & Tickets