Updated direct mail VAT guidance now out

Updated guidance on VAT on direct mail has now been published by HM Revenue and Customs, as trailed here earlier. The Charity Tax Group says that this will “provide certainty and clarity for charities” following HMRC’s change of view on the issue.

This means that contracts which charities previously thought were VAT zero-rated could now be charged at standard rate. There is a transition period to 31st July. Read more at Civil Society News.

HM Revenue and Customs links:

  • VAT Notice 700/24: postage, delivery charges and direct marketing.
  • VAT Notice 701/10: zero-rating of books and other forms of printed matter:
    • Paragraph 6.5 covering ‘The package test’ now refers to direct mailing/marketing businesses and those delivering items of printed matter to recipients on behalf of their customer to read chapter 3 of Notice 700/24.

HMRC has also made a small change to Gift Aid guidance, “to clarify recent changes on Partnership Gift Aid declarations apply to Limited Liability Partnerships”.