New VAT Advice Service for DMA Members

The Direct Marketing Association (DMA) has launched the VAT Helpdesk, a free service designed to clarify the complex rules and regulations specifically concerning printed marketing goods and services. The helpdesk was set up at the urging of the industry due to the complex rules and regulations published by the HMRC, which many find unclear and often need interpretation to understand how they apply. The DMA is warning suppliers that they could face a sizable VAT bill if they don’t get to grips with VAT legislation.

Organisations that use print-based direct marketing media are unable to reclaim VAT and therefore look to the suppliers to minimise their VAT liability. This is achieved through the design of the printed material and managing the contents of mail packs so that they are classified as zero-rated. Other ways to reduce VAT liability include special exemptions for charities and techniques such as 'single supply'.

If suppliers fail to charge their clients VAT on print-based marketing goods and services that are VAT chargeable they could be left severely out of pocket when HMRC comes calling. Of course, ignorance is no defence.

While HMRC has published guidelines on how to interpret the rules concerning VAT charges for print-based marketing services and goods, it’s left many companies none the wiser.

With pressure on suppliers to reduce costs, companies are realising that they need to assess the VAT correctly, since they - not their customers - are liable for any penalties. HMRC can apply a fine of up to 100% of the VAT shortfall and routinely backdate assessments over four years.

The VAT helpdesk is specifically for DMA members and is staffed by experts who have many years of experience and can provide guidance on zero-rated goods and the elements of risk involved in misinterpreting any of the VAT regulations.

Head of compliance and legal services for the DMA, Richard Evans, commented on the launch of the DMA VAT Helpdesk:

“We’re aware of a number of companies that have been caught out by misinterpreting the VAT rules. Unfortunately it is a case of ‘supplier beware’. In the past year we’ve seen some companies being hit by HMRC with bills totalling millions of pounds. There’s a huge grey area, for instance, around the point at which you are no longer supplying zero rated goods to a full VAT rated service. That’s why our free helpline will help companies navigate the complexities of the VAT rules in this area.”

For more information visit DMA VAT Helpdesk.

Share this page