A quick glance at the HM Revenue & Customs website may fool you into thinking that the VAT rules concerning printed materials are pretty straightforward. In fact it is clearly stated that brochures, leaflets, pamphlets, books, magazines and publications are rated at 0% VAT.
However, the specific guidelines concerning VAT on print are actually rather confusing and it can be quite tricky in some cases to work out if you should be paying nothing or 20% VAT.
VAT on printed items depends on their intended use, format, content and size. A lot of printed materials used in the day to day running of a business are rated at the full 20% but there are some exceptions that are zero-rated.
The situation is further confused by the fact that there is no legal definition for many items such as brochures, flyers and leaflets and so there is a complicated series of stipulations laid out to determine whether your ‘flyer’ is rated at 20% VAT or 0% VAT.
Confused yet? Here are some guidelines for VAT on print to help you out:
Stationery items such as business cards, letterheads, diaries, invoices and compliments slips are subject to the full rate of VAT. Other items that are subject to 20% VAT include banners, pop up stands, postcards, invitations, calendars, stickers, coupons, posters and tickets.
0% VAT print items include books, newsletters, brochures, catalogues and pamphlets. Leaflets and flyers used for advertising are also exempt but there are a number of conditions that need to be followed if they are to be zero-rated:
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- If a leaflet or flyer includes a section for data collection that is intended to be filled out and returned to the sender, this section may be subject to VAT.
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- Any document that can be used to gain free entry to an event is classed as a ticket and will be subject to 20% VAT. This includes promotional flyers, which would normally be 0% rated, but include a phrase such as “free entry with this flyer”.
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- Any flyer with an offer for a discount on goods or services is classed as a coupon and rated at 20% VAT.”
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- For advertising leaflets and flyers to qualify for the 0% VAT rate, they need to be of an ‘ephemeral nature’. This means that they would normally be thrown away after being read. Any flyers designed to be displayed on notice boards or in shop windows would be classed as a poster and subject to VAT.
- Any leaflets that are laminated or printed on high quality thick paper or card stock, indicate that they are intended to be kept for a long time rather than thrown away and will be subject to the normal VAT rate of 20%.
- Leaflets must not be larger than A4 size to be eligible for 0% VAT unless they are printed on both sides and folded down to be smaller.
To be sure that you are paying the correct rate of VAT on printed materials, you can either read the entire 27-page guideline document as published by HMRC, or you can ask your friendly print or mailing house for advice.
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