We work in the direct mailing industry with charities. We produce their appeal packs which are then sent out to specific areas or postcodes. The packs are not addressed to a specific individual. Our contract is for the design and production of the mail pack. We outsource the printing of the mail pack to a third party. The majority of the cost the charity incurs is the cost of printing the packs (about 80% of the total charges). We have always zero-rated our supply to charities where the package test requirements are met and HMRC has carried out various VAT audits and no issues have arisen. We’ve heard that HMRC has changed its view and our supplies should now be standard rated: is this correct? If so when does this apply from?
Answer
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We work in the direct mailing industry with charities. We produce their appeal packs which are then sent out to specific areas or postcodes. The packs are not addressed to a specific individual. Our contract is for the design and production of the mail pack. We outsource the printing of the mail pack to a third party. The majority of the cost the charity incurs is the cost of printing the packs (about 80% of the total charges). We have always zero-rated our supply to charities where the package test requirements are met and HMRC has carried out various VAT audits and no issues have arisen. We’ve heard that HMRC has changed its view and our supplies should now be standard rated: is this correct? If so when does this apply from?
Answer
...
If you are not a subscriber, subscribe now to read this content.
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