Why do books have vat

Some colouring and dot-to-dot books on the market, regardless of how they are advertised or held out for sale, are not considered as suitable for children under the age of 18 and are therefore standard rated for VAT purposes. These publications have one of the 4 following themes:. But, this does not include incidental use of profane language when it is used in the context of an extract from a classical piece of literature, for example a Shakespeare play.

Publications that contain scenes of pornography or gratuitous nudity. But this does not include scientific anatomical drawings and images reflected in classical works of art. This includes any image of a sexual nature that would not generally be regarded as suitable for children under 18 years of age. Publications that contain scenes of violence. This does not include images of scenes of battles and fighting that are clearly identified as based on historic events, religious stories or dramatic works.

Publications that depict illegal acts. This would include images that depict theft, assault, drug taking, robbery. This list is not exhaustive. This does not include images that are clearly identified as based on historic events, religious stories or dramatic works. While the colouring and dot-to dot books do not need to specifically state they are for sale to children to benefit from the zero rate, they must not state that they are suitable or specifically aimed at adults or grown-ups or any similar phrase.

In addition, publications held out for sale to children should not be sold together with adult titles. This is designed to ensure children do not mistakenly access books dealing with adult themes.

For online sellers, they will need to clearly note in their selling details whether a book is suitable for children in such a way that parents can determine suitability at a glance rather than having to read tracts of narrative.

A piece of music commissioned from a composer is standard-rated see paragraph 7. Supplies of all printed maps and charts designed to represent the natural or artificial features of countries, towns, seas, the heavens are zero-rated. They can be printed on paper or other material such as cloth and in the form of single or folded sheets or a collection of such sheets bound together in book form for example, an atlas.

Sheets intended for public display are standard-rated. Stationery items such as account books and exercise books are standard-rated. Some items which are standard-rated stationery when new and unused can be zero-rated if sold after they have been completed, provided that they then have the physical characteristics of a book or other zero-rated item.

Individual manuscript or typed letters are standard-rated, as are collections of such letters if they are unbound or loosely bound. Permanently bound collections of letters are zero-rated. See Notice 48 Extra-Statutory Concessions. Photocopies of zero-rated items are always standard-rated unless the copies can be properly described as books, booklets, brochures, pamphlets, leaflets, and meet all the criteria for such items in the relevant preceding paragraphs.

A bundle of photocopies would not constitute a book unless it included copies of all the pages of a book and was in a permanent binding. Photocopies of parts of books, extracts from periodicals cannot be zero-rated unless they are complete in themselves and have the characteristics of zero-rated items. Certain printed items that are not within the Group 3 zero rating and are therefore usually standard-rated, may be zero-rated when supplied to charities for use in connection with collecting monetary donations.

Minor accessories, for example dust covers, clasps, book marks, slip cases and presentation cases, supplied with any zero-rated items, are usually regarded as forming part of the zero-rated item but see section 6. Ring-binders and similar binders supplied on their own are zero-rated if they are designed to contain a loose-leaf book, provided the exact title of that book is printed on the outside. A company name alone is not enough for zero rating.

A binder supplied with loose-leaf pages to make a book is treated as part of the zero-rated supply whether titled or not. All other binders or files for general or office use are standard-rated. This includes binders for part works, journals or periodicals whether specifically titled or not.

Most folders and wallets are standard-rated but if they convey information themselves they may qualify as brochures see paragraph 3. If you lend or hire out an article which is zero-rated under the rules explained in this notice, or sell a share or part interest in such an article, your supply is always zero-rated.

Libraries which charge for the loan of books will therefore be making zero-rated supplies. This will also apply to reference libraries which charge for the use of their books on their own premises. If you impose a surcharge for handling a small order, which increases the unit price of the goods, it is part of the price of the goods and is zero-rated if the goods are zero-rated.

Subsidy or vanity publishing occurs when an author who is unable to have work published pays a publisher to do so. If the publisher produces books which are all delivered to the author, the payment by the author is a consideration for a supply of books and is zero-rated.

If the bulk of the books remain with the publisher, payment by the author is partly for the supply of books zero-rated and partly for publishing services standard-rated. When you supply the same person at the same time with a number of different goods or services or both, a transaction with more than one element occurs.

You may, or may not, charge a single inclusive price for the transaction. If the individual elements are all liable to VAT at the same rate, you can calculate the tax that is due in the normal way. If the individual elements are not liable to VAT at the same rate, you have to decide whether you are making a single supply or a multiple supply.

When you supply books or magazines packaged with another item, you must determine whether they constitute single or multiple supplies, in line with the principles established in the European Court of Justice judgment in Card Protection Plan CPP and subsequent decisions.

You make a single supply when one element of the supply is the principal element to which all the other elements are ancillary, integral or incidental. An ancillary element does not constitute, for the customer, an aim in itself, but is a means of better enjoying the principal service or goods supplied. Integral elements are elements that are essential, necessary or incidental to the main supply. An incidental element is something that naturally accompanies the main supply, such as packaging.

You make a multiple supply if one or more element is distinct and independent. The following points may indicate that more than one supply is taking place:. There are three possible liability outcomes if zero-rated printed matter is supplied with other items:. Sometimes it is easy to identify a multiple supply, as items supplied together can be used independently of each other.

It is quite possible to use the film or tape independently of the book and, indeed, they need separate equipment to use them. Similarly, a child can use a felt-tip pen on any paper of their choice, it is sold with a colouring book as a marketing device. These may contain zero-rated books or booklets and standard-rated items such as jigsaw puzzles or toys. You need to decide whether the omission of any one component part would diminish the pack as a whole. It is not possible to give overall guidelines on these activity packs as each one is different, and must be judged on its own merits.

Where you make a multiple supply of a package consisting entirely of items printed on paper or card, you have a choice.

You can account for VAT by apportionment between the standard-rated and zero-rated elements or you can apply the package test. For this purpose, a package is a collection of items printed on paper or card usually enclosed in some sort of wrapper. The articles must physically form a package and have a common link in that they are intended to be used together, examples are:.

The package test may reduce your tax burden and be simpler than the apportionment described above. It operates as follows:. In the event that the standard and zero-rated elements cost exactly the same amount, apportionment should be applied. If you supply a package to a charity you can treat some items connected with collecting monetary donations as zero-rated for the purposes of the package test.

If you link a cover-mounted item such as a sachet of perfume or a CD to a magazine, you can treat it as zero-rated if all the following conditions are met:. This linking of goods is normally done by the publisher, but can take place at any point in the distribution chain for example, distributor, retailer.

If at the point of linkage the supply satisfies the terms of this concession, it becomes a single zero-rated supply and will continue to be a single supply throughout the chain. If the supply does not satisfy the terms of the concession, you will have to consider whether the supply is a single or multiple supply under the normal rules explained above.

Some contracts to supply services involve, to a greater or lesser extent, the production of goods zero-rated under Group 3. If you supply such services, you should first consider whether the supply is either:. If your services are of an original or specialist nature see paragraph 7. If your service is of the production of goods, then it will be zero-rated where your service has produced new goods and those goods are themselves zero-rated see paragraph 7.

When you also supply goods with those services as incidental products then you must standard-rate those goods even if they are zero-rated under Group 3. Here are some examples:. New goods are produced when the essential characteristics of the goods are altered. Note in particular in the following situations.

As the zero rating of books makes people more eager to buy books, it is one of the most effective ways of promoting book culture, literacy and reading. As a result, it is very likely to have a positive effect on cultural and educational policy, freedom of expression, and the creation of new independent publishing businesses.

This reasoning also applies to e-books, which should therefore be equally supported. Subscribe to IPA News. Click on each country to read more information if applicable. Albania For books a special VAT regime is applied. Therefore, VAT as a reimbursable tax does not function as such in Albania. So, it is a tax that burdens only on publishers, consequently on books.

Goods are taxed when they enter the country, as almost everything is imported. Australia Some items such as food are not subject to GST. Brazil Different states apply different rates. Chile The electronic book is recognized as part of the new National Book and Lecture Policy , presented by the Minister of Culture last April. This new Policy does not include any change in the VAT situation.

Physical books and periodicals are already exempt. This video can not be played To play this video you need to enable JavaScript in your browser. Chancellor Rishi Sunak removes 'reading tax'. The BBC is not responsible for the content of external sites. View original tweet on Twitter. Related Topics.