RCB/10/15 VAT—direct marketing services using printed matter
Revenue & Customs Brief, Issue 10. 15 July 2015
Purpose of this brief
This brief explains HM Revenue and Customs (HMRC) approach to supplies of direct marketing that have been wrongly treated as zero-rated supplies of delivered goods.
It sets out those circumstances where we will not take action to assess for past errors (see “Transitional arrangements” below).
It also describes the settlement terms available to businesses whose supplies do not come within the scope of the transitional arrangements (see “Printed matter supplied with other services” below).
Who needs to read this?
Anyone who makes or receives supplies of direct marketing services using printed matter.
Action to take
To be aware of the—
• correct VAT treatment of direct marketing services using printed matter
• transitional arrangements where direct marketing services using printed matter were treated incorrectly for VAT
• scope and time limit of an HMRC settlement offer for supplies that do not come within the scope of the transitional arrangements.
The Court found compound interest to be due as claimed, taking into account the “exceptional” circumstances of Littlewoods' situation. The Court also held that that the current statutory provisions relating to VAT did provide an appropriate amount of interest in many cases.
HMRC has identified that a number of suppliers of printed matter combined with other services have been treating the supply as one of zero-rated delivered goods. In HMRC's view, these supplies should properly be characterised as a supply of standard-rated direct marketing services.
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