Transitional Arrangements for Direct Marketing Errors

In July of this year, HMRC posted a new brief outlining how they intend to treat standard-rated supplies of direct marketing that made use of printed matter and were incorrectly treated as supplies of delivered goods that were instead liable to the zero-rate of VAT. This will affect anyone who makes or receives supplies of direct marketing services using printed matter and therefore it is key that those who are affected are well versed in the VAT treatment of such supplies.  This is particularly relevant for charities and other organisations that are restricted in the amount of VAT that they can claim on expenditure.


Upon release of the Brief, HMRC granted suppliers who has made past errors a transitional period where they could inform HMRC of these errors with no fear of retrospective action being taken against them. This period ended on 31st July and now such suppliers have until the 30th November 2015 to notify HMRC that they intend to apply the transitional arrangements. Failure to notify HMRC before this date will mean that these transitional arrangement will no longer be available and the supplier may face a retrospective challenge from HMRC (which may result in a VAT cost that might be passed on to the charity).


If you are a charity and believe the above applies to you, it is advantageous to discuss your options with one of our specialist VAT consultants free of charge today.

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