18 November 2015

Deadline looms for printers to register with HMRC to avoid direct marketing VAT charges

Members have until the end of the month to register with HMRC if they have treated elements of direct marketing projects as zero-rated for VAT in the past, and want to avoid retrospective charges.

Due to the confusion created by HMRC's previous advice, it has agreed with industry trade bodies a transitional period for those businesses who have treated supplies of direct marketing incorrectly for VAT, which ended on 31st July 2015.

The latest HMRC brief states that:

"Suppliers must notify their intention to adopt the transitional arrangements to HMRC by 30 November 2015 by email to [email protected] or by post for the attention of:

John Hegarty
Local Compliance
HM Revenue and Customs
S0717
Newcastle
NE98 1ZZ 

The sender must be an "authorised person" of the business. The email must acknowledge acceptance of the terms of the transitional arrangements as follows: (Insert sender organisation and VAT registration number) intends to adopt the transitional arrangements set out in Revenue and Customs Brief 10 (2015) from the Commissioners of HMRC dated 15 July 2015."

The brief also states that "These transitional arrangements only apply to businesses which had misunderstood the guidance in the former VAT Notice 700/24 Postage and delivery charges (1 April 2003).  Businesses which had understood the guidance cannot seek to apply these transitional arrangements and HMRC will not repay VAT claimed in any Error Correction Notifications (ECN) which seek to claim the benefit of these arrangements".

Andy Brown, secretary of the BPIF's government and industry committee warns that "not only will members who wish to take advantage of this transition period only have until the end of the month to register, but they may also have their level of 'understanding' of the guidance come under scrutiny at some point by HMRC."

The latest HMRC briefing can be found here.