Most printed items are standard rated for VAT. That means you will be charged VAT when you buy these goods (assuming you use a VAT registered supplier). If your business is VAT registered too, then you can claim back the VAT paid in the usual way, and this article will not be of any benefit.
However, if you are just starting out, or if you are under the threshold for registering for VAT and do not have a VAT registration number, there are a few pointers worth knowing. Leaflets in particular are usually zero rated for VAT unless you do something that, in the eyes of HM Customs and Revenue (HMRC), causes it to be something other than a leaflet according to their criteria.
Examples include, but are by no means limited to:
Designing a leaflet to look like a poster, with the intention that it is to be shown in a shop window
HMRC’s definition of a leaflet is that it is ‘ephemeral’ – that is, it is designed to be read a few times and then thrown away. Clearly a sheet designed for display in a shop window does not fit this criterion.
Offering a discount such as ‘10% off when you visit our restaurant and show this leaflet’
Again, a leaflet of this kind is intended to be kept for a length of time rather than just read and thrown away. It could also be classed as a voucher rather than a leaflet, and printed vouchers are standard rated for VAT.
One way round this would be to offer a discount such as ‘10% off when you mention seeing this leaflet’ or ‘10% off when you mention ‘Easter Discount’ to us’. Neither of these require the customer to keep the leaflet, and it would therefore be zero rated.
Incorporating a coupon area for customers to complete and return
A leaflet intended to be filled in and returned in its complete state is a form – and forms are standard rated. If your coupon area comprises less than 25% of the total area of the leaflet, such as a tear-off portion, then it will still be zero rated providing all of HMRC’s other criteria are met
So, here we present a guide to the types of work which are VAT Zero rated for design and print costs. Please note – Leaflets have special rules (see bottom).
Remember, this list is not definitive. It is only intended as a guide. If in any doubt contact your local VAT office. The last thing anybody wants is a surprise audit.
In order for a leaflet to be Zero Rated it must:
- Consist of a single sheet of paper not greater than international standard A4 in size (larger publications up to A2 size can be zero rated provided they are printed on both sides, folded down to A4 size or smaller and meet the other conditions)
- Be primarily intended to be held in the hand for reading by individuals (rather than for hanging up for general display)
- Convey information
- Be complete in itself (and not a part work)
- Contain a significant proportion of text
- Be printed on a stock which weighs no more than 230 gsm (grammes per square metre)
Printed sheets where more than 25% of the total printed area is for completion are standard-rated. Where the sheet has a portion to be detached and returned, the portion to be detached must be less than 25% of the whole leaflet for the leaflet to be zero-rated. Whatever the area for completion, a sheet which is to be returned whole after completion is always standard rate
Items for which you MUST pay VAT