HMRC have issued a brief, 10 of 2015, on VAT and printed direct marketing. The problem is HMRC consider supplies of printed matter with other services should be taxable direct marketing services, not zero-rated delivered goods. HMRC have also updated their guidance in VAT Notice 700/24 on postage, delivery charges and direct marketing and VAT Notice 701/10 on zero-rating books and other printed matter. HMRC say where there has been a misunderstanding about direct mail they will not take action about past VAT returns if the position is rectified by 1st August 2015. The issue is complex and with the new position from HMRC any direct marketing trader needs to be clear about the right VAT treatment for themselves.
Tax Barrister, Accountant