Distribution of printed products
Most services, including delivery and marketing services, are standard rated for VAT, so they carry 20% VAT. Printed goods such as leaflets, newsletters and pamphlets are zero-rated for VAT. Where delivery is part of the service of supplying printed matter to the customer, the whole cost can be zero rated.
However, if the delivery of printed items is part of a direct marketing service the cost should generally be standard rated. Direct marketing can include posting or arranging the posting (including door drops) to customers of publicity materials. Many businesses have been zero rating services which involve the delivery of printed materials as part of a marketing campaign.
In HMRC's view, supplies of printed matter which are combined with other services such as marketing, should be categorised as a single supply of standard rated direct marketing services. It updated its guidance on 15 July 2015 concerning postage, delivery and printed items. If your business relied on the previous HMRC guidance, you need to adjust your VAT treatment.
HMRC has said that it will not take retrospective action for supplies made before 1 August 2015, where that supply was delivery of addressed or unaddressed mail. However, in other circumstances HMRC will take action and it expects those businesses to pay up the additional VAT due.
If you are confused by the new HMRC guidance – which is not exactly crystal clear – do ask us to clarify things for you.