Advertising mail VAT latest: DMA asks HMRC to extend grace period

The DMA has once again called upon HMRC to publish its long-promised official guidance as to how it treats VAT liability of ‘single supplies’ of advertising mail print that includes the cost of postage.

Since I last blogged on the issue two weeks ago we have written a letter to Keith Parnell, senior policy advisor at HMRC, once again seeking clarification.

The DMA objects to the current HMRC interpretation as expressed by Mr Parnell in his previous letter. Furthermore, Mr Parnell in his last letter stated that he expected all supplies to be treated ‘correctly’ from the 1 October. However, as there is no official guidance forthcoming other businesses will continue to operate in this manner which would put DMA members at a competitive disadvantage if they ceased to zero rate a single supply of goods. The DMA has been consistent that its main aim is a level playing field for its members. The timeframe should be extended until HMRC officially clarifies its position for the industry.

We have also sent a letter to David Gauke MP, financial secretary at the Treasury, reiterating our message that the window is extended until official guidance is published by HMRC.

It is two years since we originally sought clarification from HMRC on the issue and with this in mind it is imperative that HMRC publishes guidance as soon as possible to provide a level playing field for businesses.

The DMA will be meeting with the Charity Tax Group and the Institute of Fundraising to discuss the matter, as charities are one of the groups that will be hit the hardest by the HMRC’s current interpretation of the rules. It is likely that the HMRC will be challenged in the courts if they proceed with their current interpretation and so we must make preparations for that outcome.

We will be keeping members informed of progress and will notify you as soon as HMRC respond to my letter.

DMA Letter to HMRC October 2014

DMA Letter to David Gauke HM Treasury October 2014