HMRC (Her Majesty’s Revenue and Custom), after consultation with the Direct Marketing Association (DMA) has released new regulations surrounding VAT exemption Charity Mailings particularly, that historically have been completely exempt of VAT.
Until October 2014, the HMRC’s industry guidelines were that if a single source supply including the delivery element (postage) was sourced through a single supplier (a mailing house such as Romax for example), the VAT was exempt entirely.
The new regulations recently released by HMRC state that ALL postage must now have VAT applied, and postage can no longer be included in the single source supply. This does not however, apply to the print and packaging supplies, where the VAT Packaging rules and Printed Paper VAT regulations still apply.
So, moving forward this new regulation will affect charity direct mail clients in that the postage element of their jobs must now be charged at cost plus 20% VAT, whilst the print and enclosing element may still qualify for VAT exemption.
Romax has since October 2014, been charging VAT on all postage, and it is understood that HMRC, will be making no retrospective charges or penalties as long as suppliers adhere to this new regulation from October 2014 onwards.
Romax Marketing & Distribution, a Greenwich-London based company, provides a wide range of services in Direct Marketing for B2B and B2C, Direct Mail, Data Management, Printing, Discount Postage and Membership Communication Services and Consultancy. Contact us: firstname.lastname@example.org +44 (0) 20 8293 8550