DMA Draft guidance on VAT for print services
16 Jun 2015
Our new draft advice based on the latest HMRC guidance. Read carefully if you provide, or use, VAT exempt or 'single-sourced' services.
Any supplier who is providing zero rated print together with other services eg
- posting or arranging the posting of customer mail such as publicity, advertising material or promotional goods to many recipients, including unaddressed mail
- analysis or manipulation of data (either provided by the customer or sourced directly) for strategic or marketing reasons - for example, to target direct mail at specific groups based on geography, socio-economic factors or gender of recipients
- purchase or rental of third party mailing lists, including for amalgamation with customer’s own lists
- analysis of own and customer data to produce reports on campaign results and advice on strategy
runs the risk that HMRC could interpret this as providing a single supply of a Direct Marketing Service. This would mean that the whole supply – including the print that was zero rated – becomes liable for VAT at the standard rate.
The criteria for what determines whether you are making a single or multiple supply unfortunately aren't straightforward but HMRC do provide some guidelines:
Typical indicators of a single supply would be:
- A single price for the job ie elements not priced individually
- Advertised as a package
- Individual elements not available separately eg can’t get print unless you also take postage
- What does the customer perceive they are getting? A highly subjective criterion but one that might apply if the customer believes that they can only buy a “one stop service” from you.
In a multiple supply each element is clearly distinct and independent. Typical indicators of multiple supply would be:
- Elements priced and invoiced separately.
- Elements clearly available separately- ideally with separate contracts
- Elements of the supply are not connected or inter-dependent eg can’t get one element without buying another
Full details of Single/multiple are available here http://www.hmrc.gov.uk/manuals/vatscmanual/VATSC80000.htm. If in doubt we recommend that you get professional advice.
| What do you supply? | VAT treatment | Notes |
| Print only |
Can be zero rated if it meets the criteria in VAT Notice: 701/10 zero-rating of books and other forms of printed matter |
Creative and directly related production costs eg artwork can be included as part of a zero rated supply of print. |
| Data | ||
| Print + address cleaning/correction | If print meets the criteria in VAT Notice: 701/10 zero-rating of books and other forms of printed matter then data costs can be included as part of zero rated supply of print | Data work necessary to meet postal operators requirements only eg sortation and address cleaning/correction. |
| Print + suppressions | If print meets the criteria inVAT Notice: 701/10 zero-rating of books and other forms of printed matter then data costs can be included as part of zero rated supply of print | Suppressions eg MPS on data supplied by the customer to meet postal operator requirements eg Advertising Mail. |
| Print +address cleaning/correction + suppressions | If print meets the criteria inVAT Notice: 701/10 zero-rating of books and other forms of printed matter then data costs can be included as part of zero rated supply of print | |
| Postage or unaddressed mail media | ||
| Print + postage |
Print can be zero rated if it meets the criteria in VAT Notice: 701/10 zero-rating of books and other forms of printed matter Postage should be a separate standard rated supply |
NB see notes on single v multiple supplies |
| Print +unaddressed media cost |
Print can be zero rated if it meets the criteria in VAT Notice: 701/10 zero-rating of books and other forms of printed matter Unaddressed media costs should be a separate standard rated supply |
NB see notes on single v multiple supplies |
| Other services | ||
| Print + data work other than address correction or suppressions as above eg selections/targetting |
Print can be zero rated if it meets the criteria in VAT Notice: 701/10 zero-rating of books and other forms of printed matter Data/targeting etc costs should be a separate standard rated supply |
NB see notes on single v multiple supplies |
| Print + list buying |
Print can be zero rated if it meets the criteria in VAT Notice: 701/10 zero-rating of books and other forms of printed matter List buying should be a separate standard rated supply |
NB see notes on single v multiple supplies |
| Print + campaign analysis |
Print can be zero rated if it meets the criteria in VAT Notice: 701/10 zero-rating of books and other forms of printed matter Analysis costs should be a separate standard rated supply |
NB see notes on single v multiple supplies |
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