Transitional arrangements on direct marketing VAT

HM Revenue and Customs has issued a ‘Brief’ setting out its approach to supplies of direct marketing that have been wrongly treated as zero-rated supplies of delivered goods. This follows discussions with Charity Tax Group and the Direct Marketing Association after HMRC changed its view on the VAT status of direct mail.

As summarised by Charity Tax Group:

The Brief explains HMRC’s approach to supplies of direct marketing that have been wrongly treated as zero-rated supplies of delivered goods. It also sets out those circumstances where HMRC will not take action to assess for past errors, confirming that the transitional period during which the retrospection concession applies will end on 31st July. Importantly, it makes clear that a requirement of these ‘transitional arrangements’ is that the supplier notifies HMRC that they intend to apply the arrangements by 30th November. It also describes the settlement terms available to businesses whose supplies do not come within the scope of the transitional arrangements.

The brief also confirms that the transitional arrangements will now apply to door drops where it can be demonstrated that the supplier’s service consisted only of the printing and delivery of zero-rated printed matter and the customer has instructed the supplier as to the timing and location of the deliveries.

See CTG press release or go direct to ‘Revenue and Customs Brief 10 (2015): VAT – direct marketing services using printed matter‘.

The relevant VAT Notices are given in our item ‘Updated direct mail VAT guidance now out‘ (published a month ago).