Extract from VAT Notice 701/10

The following is Sections 3 and 4 from the HM Revenue and Customs VAT Notice 701/10, Zero-Rating of Books etc. dated October 2010. The 'Group 3 items' are explained in the Notice as follows:

"The words in Group 3 are used in their ordinary, everyday sense. This means they are restricted to goods produced on paper and similar materials such as card (but see paragraph 3.7). Most items qualifying for the zero-rating will be products of the printing industry (including items printed in Braille), but goods which are photocopied, typed or hand-written will, in some cases, also qualify.

"Goods containing text in other formats such as audio or video cassettes or CD Rom are standard-rated. This includes the storage and distribution of text by fax, e-mail, microfiche, or any similar process. Transcripts or print-outs made of such information are zero-rated if they are supplied in the form of books, booklets, brochures, pamphlets or leaflets as defined in section 3.

"The supply of text by electronic transmission, via the internet, or similar means is also standard-rated. Such supplies are of services, not of goods, and different VAT rules will apply to them (such as those on the place of supply of services – see Notice 741 Place of Supply of Services."

It is not an exhaustive guide and you should read the complete VAT Notice 701/10 from the HMRC website if you are unsure about any of the details.

3. Meaning of the Group 3 items

The meaning of the individual items is explained in detail below. Whether a particular item falls within those meanings depends mainly on its physical characteristics and function but also, to a lesser extent, on its content.

3.1 Books and booklets

These normally consist of text or illustrations, bound in a cover stiffer than their pages. They may be printed in any language or characters (including Braille or shorthand), photocopied, typed or hand-written, so long as they are found in book or booklet form.

Supplies of any of the following are zero-rated:

literary works
reference books
directories and catalogues
antique books
collections of letters or documents permanently bound in covers
loose-leaf books, manuals or instructions, whether complete with their binder or not, and amendments to zero-rated loose-leaf books, even if issued separately.

School work books and other educational texts in question and answer format, are zero-rated because the spaces provided for the insertion of answers are incidental to the essential character of the book or booklet. The same applies to exam papers in question and answer format provided they qualify as books, booklets, brochures, pamphlets or leaflets.

But supplies of the following are standard-rated:

books of plans or drawings for industrial, architectural, engineering, commercial or similar purposes
picture card and stamp albums, unless they contain a substantial amount of reading matter which is complete in itself, and no more than 25% of the album is set aside for the mounting of cards and stamps
completed stamp albums, and
products that are essentially stationery items, for example, diaries and address books.

3.2 Brochures and pamphlets

These are not defined in law and whether a particular product qualifies as a brochure or pamphlet is a matter of fact and impression.

Brochures usually consist of several sheets of reading matter fastened or folded together, which are not necessarily bound in covers. They usually contain advertising material in the form of text or illustrations.

Pamphlets are similar, but are usually comprised of material of a political, social or intellectual nature.

Single sheet brochures and 'Wallet' type brochures designed with a flap may be zero-rated provided they:

convey information, and
contain a substantial amount of text, with some indication of contents or of the issuing organisation, and
are not primarily designed to hold other items, and
are supplied complete.

3.3 Leaflets

These are also not defined in law and again whether a particular product qualifies as a leaflet is a matter of fact and impression. Leaflets normally:

consist of a single sheet of paper not greater than international standard A4 in size (larger publications up to A2 size can be zero-rated provided that they are printed on both sides, folded down to A4 size or smaller and meet the other conditions)
are intended to be held in the hand for reading by individuals (rather than for hanging up for general display)
convey information
are complete (and not a part work)
are supplied in sufficient quantity (at least 50 copies) to permit general distribution
are printed on limp paper, and
will either be of an ephemeral nature (designed to be read a few times and then thrown away) or be designed to accompany some other product or service, for example an instruction leaflet.

Items printed on stiff paper and card are not automatically excluded from the definition of leaflets. However we do regard the use of stiff paper and card as an indicator that the items have a function which would exclude them.

For example if the item’s main function were designed to be kept or used for a specific purpose in its own right, rather as ancillary to another supply, it would not be a leaflet. Examples of items that would not be leaflets would be those designed to be used for any of the following:

as a calendar
to obtain admission to premises
to obtain a discount on goods or services
as reference material, or
for completion or return (see paragraph 3.4).

We consider that items printed on laminated paper are designed to be kept and therefore not leaflets. On the other hand, orders of service are not normally designed to be kept and may be zero-rated.

3.4 Items with areas for completion

Items which might otherwise be considered to be leaflets, brochures and pamphlets may not be zero-rated if they are primarily intended for completion or detachment. This distinguishes brochures, pamphlets and leaflets from standard-rated forms.

We accept that items are not primarily intended for completion or detachment if 25% or less of their total area consists of:

areas which are blank and available for completion, or
parts to be detached and returned.

Where there is both an area for completion and a part to be detached and returned, then the two together must not exceed 25% of the total area of the publication.

Whatever the area for completion, a publication which is designed to be returned whole after completion is always standard-rated.

3.5 Newspapers

Newspapers are issued at least once a week in a continuous series under the same title. Each issue is usually dated and/or serially numbered. They usually consist of several large sheets folded rather than bound together, and contain information about current events of local, national or international interest.

Publications which do not contain a substantial amount of news are not newspapers.

Many newspapers also carry items such as readers’ letters, sports news, the weather forecast, crosswords and features (including feature supplements) on fashion, gardening, etc., or more specialised topics.

3.6 Journals and periodicals

These are magazines issued in a series at regular intervals, more frequently than once a year, either in newspaper format or as paper-bound publications. They may contain information of a specialised nature (for example legal, medical, financial, commercial, fashion or sporting) or be of more general interest. They are normally a mixture of articles and stories with the content changed for each edition. Although they consist essentially of reading matter, they may also consist mainly of illustrations or advertising matter.

‘Poster-magazines’, which have some textual material on one side and a related picture capable of being used as a poster on the other side and which are folded into a magazine format are zero-rated as periodicals, provided they are issued at regular intervals.

Publications whose main purpose is to promote your own products or services are not journals or periodicals, even if they are published regularly. If you supply such publications, you can still zero-rate them if they fall within one of the zero-rated categories, such as brochures.

3.7 Children’s picture books

These are zero-rated, whether they are printed on paper, plastic or textiles, such as children’s rag books, unless the article is essentially a toy. Examples of articles which are standard-rated as toys include:

books consisting wholly or mainly of pictures of models for cutting out – but books with printed text directly related to the material for cutting out covering at least 25% of the pages can be zero-rated. (Pages of assembly instructions should not be included as printed text for the purpose of determining eligibility for zero-rating), and
items where the 'pages' are boards for games.

3.8 Children’s painting books

Supplies of the following are zero-rated:

children’s painting and drawing books with sample pictures for copying, or outlines of pictures for colouring, painting or drawing
similar books with ‘invisible’ outlines to colour which can be made visible by rubbing with a pencil or applying water with a paint brush
painting books in which the small amounts of water colour required for colouring are contained in the book (for example, in the form of a palette), and
activity books which combine pages of colouring with pages of puzzles, quizzes and the like.

3.9 Music

Printed, duplicated or manuscript music of all kinds is zero-rated. It may be:

instrumental or vocal
printed or hand-written
bound or on loose sheets
illustrated or not, or
in any system of notation, including numerical symbols or Braille.

Music rolls and blank music manuscript are standard-rated.

A piece of music commissioned from a composer is standard-rated (see paragraph 7.2).

3.10 Maps, charts and topographical plans

Supplies of all printed maps and charts designed to represent the natural or artificial features of countries, towns, seas, the heavens, etc 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).

But supplies of any of these are standard-rated:

plans or drawings for industrial, architectural, engineering, commercial or similar purposes, in any format
framed maps whose primary purpose is decorative
posters
pictorial wall charts
aerial photographs
globes, three dimensional models and similar articles, or
decorative maps printed or woven into textile articles such as scarves, handkerchiefs, tea-towels, tapestries, rugs.

4. Items not included within any of the Group 3 items

4.1 Posters

Sheets intended for public display are standard-rated. For ‘Poster-magazines’, see paragraph 3.6.

4.2 Stationery

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. Examples are completed diaries or ships’ logs, but not completed stamp albums.

4.3 Letters

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.

If a ‘stock’ or basic letter is supplied with an individual name or address of the recipient added (by whatever means) that supply is standard-rated. Uncompleted ‘stock’ or basic letters may qualify as leaflets (paragraph 3.3), if the portion for completion consists of no more than the recipient’s name and address, a reference number and a signature.

4.4 Incomplete publications

Parts of books, unbound pages and separate illustrations are standard-rated.

By concession, the following are zero-rated:

part work publications designed to build up into a zero-rated book. Once a complete book has been supplied, amendments to it may also be zero-rated.
Card based continuity series publications, even though not bound, but stored in their container will for, VAT purposes, be treated as a book.

See Notice 48 Extra-Statutory Concessions.

4.5 Photocopies

Photocopies of zero-rated items are always standard-rated unless the copies can be properly described as books, booklets, brochures, pamphlets, leaflets etc, 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 etc cannot be zero-rated unless they are complete in themselves and have the characteristics of zero-rated items.

If you provide ‘instant’ photocopying or duplicating services and you cannot determine the VAT liability of the copies which you supply, you should charge and account for VAT at the standard rate.

4.6 Supplies to charities

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. For details see Notice 701/58 Charity Advertising and Goods Connected with Collecting Donations.