(scotland) Limited
  • 0141 636 9353
  • 0141 636 9490
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Forthcoming VAT changes are likely to have a potential financial impact on the charity sector.

New rules, with effect from 1 April 2015, relate to charities' arrangements for consolidated services covering the production, postage and delivery of printed material (i.e. direct mailing services) from a single supplier.

Generally, the charity sector understood that contracts for direct mailing services to publicise their fundraising should be zero-rated for VAT purposes. However, it is HMRC's view that single-source contracts covering a single supply of printing, sorting and delivery of direct mail (i.e. marketing services) should be standard-rated.

HMRC will be publishing new detailed guidance for the charity sector in early 2015 and we understand that the changes will only be effective from 1 April 2015. That is, HMRC will not look to take retrospective action and seek to raise VAT assessments where there has been a genuine misunderstanding around the historic VAT interpretation taken by the charity sector and, therefore, charities can continue their current arrangements up until 31 March 2015.

With effect from 1 April 2015, we understand that the printing of direct mail packs, but not the distribution of such packs, will continue to benefit from zero-rating.

The impact on charities is that additional VAT costs may now be incurred, which could give rise to partial, or wholly irrecoverable input tax (VAT).

Who is potentially affected?

  • Charities and providers of direct mailing services.

How can VAT Services (Scotland) Ltd help you?

  • Assist charities and/or suppliers in reviewing the current contractual arrangements and determine if any necessary changes are required to ensure the charities avoid any unnecessary VAT charges being applied from April 2015.

Contact us

Should you wish further information on the above, please do not hesitate to contact Gary using the details outlined below.


Gary Moore
Direct line 0141 636 9353
Mobile 07812 061 582
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