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What is Value Added Tax (VAT)?

Value Added Tax (VAT) was introduced on April 1st 1973 and is a tax that’s charged on most goods and services that VAT-registered businesses provide in the UK. It’s also charged on goods and some services that are imported from countries outside the European Union (EU), and brought into the UK from other EU countries.

VAT is charged when a VAT-registered business sells to either another business or to a non-business customer.

There are three rates of VAT, depending on the goods or services the business provides. The rates are:

  • standard – 20 per cent
  • reduced – 5 per cent
  • zero – 0 per cent

There are also some goods and services that are:

  • exempt from VAT (also known as Zero Rated goods and services)
  • outside the UK VAT system altogether

Understanding where VAT applies is important since many of the products supplied by printers fall under the VAT exempt category and sometimes print companies send incorrect invoices and charge VAT on zero-rated items (ie ones for which you should not pay VAT).

Business Link offers a helpful, thourough and detailed explanation of VAT.

On June 22nd 2010 the Chancellor of the Exchequer announced a rise in VAT to 20%, which comes into force from January 4th 2011. Because of the rise, it will be even more important to keep an eye on whether your purchase is VATable in the new year.

Zero Rated Print Products and Services

The following items which are supplied by most printers as well as the team here at Devon Print are Zero Rated. I.e. they are exempt from VAT.

  • Books
  • Booklets
  • Brochures
  • Catalogues
  • Directories
  • Flyers (to be distributed by hand)
  • Journals
  • Magazines
  • Manuals
  • Maps
  • Sheet Music
  • Newsletters
  • Newspapers
  • Pamphlets
  • Price lists (without an order form)
  • Timetables

VATable Print Products and Services

These next set of items are all VATable products and services so make sure to check explicitly that your quote includes VAT to avoid finding an extra 20% on your bill when you come round to paying!

  • Acceptance cards
  • Business cards
  • Calendars
  • Certificates
  • Compliment slips
  • Coupons
  • Delivery notes
  • Diaries, envelopes
  • Folders
  • Forms
  • Invitations
  • Invoices
  • Labels
  • Letterheads
  • Postcards
  • Posters
  • Questionnaires
  • Stationery
  • Stickers
  • Tickets
  • Transparencies

Also, services such as scanning, lamination and binding when not included with a print job, duplication of photographs, design, photography and photocopying are all VATable.

Leaflets and VAT (the special case)

Leaflets are a special case. To be zero rated they must satisfy a number of conditions: Firstly, they must convey information (i.e. have a significant amount of text) and be made for hand-held reading rather than display on a wall. Secondly, they must be made of a single sheet of paper up to A4 size (or up to A2 size if printed on both sides of the unfolded sheet and then folded down to a final size smaller than A2). Thirdly they must be a complete item not part of a larger item. And finally, to qualify as zero rated, leaflets should not be printed on a card stock of over 230gsm.

The other thing to consider is whether the leaflet contains a form. If more than a quarter of the printed matters consti- tutes a form the leaflet is VATable!

Summing up VAT

As we’ve seen VAT is a pretty simple concept to understand however refering to this list will ensure that you don’t get charged VAT on products that you shouldn’t if you choose to deal with printers independently!