UK levies standard VAT postage services

The UK’s HMRC has provide new guidance on the VAT rates for the supply of direct marketing services such as producing, delivering and posting packages, leaflets and similar marketing related materials sent to customers.

Under Notice 700/24, such supplies are generally subject to the full, standard UK VAT rate of 20%. There is limited scope for the use of zero rating even where there printed packages which would ordinarily attract nil VAT.

The notice does include a ‘Package Test’ whereby where deliveries include exclusively printed materials, normally subject to zero-rate VAT, there is scope for us of apportionment of nil VAT. If the package contains a majority of nil rated book-materials, then all the goods may be nil rated.

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