On 15 July 2015, HMRC published Revenue & Customs Brief 10/2015 which confirms that supplies of direct marketing services using printed matter are standard rated for VAT.
HMRC accepts that its guidance in Notice 700/24 was not clear and that has led some businesses to misunderstand which supplies should be zero or standard rated. It has now updated the guidance to provide greater clarity.
Where there has been a misunderstanding, HMRC has confirmed it will not take any retrospective action for supplies made prior to 1 August 2015. This transitional period was agreed with trade representatives and is available for certain cases. The Brief sets out in detail the circumstances, for addressed and unaddressed mail, where HMRC will take no action for past errors.
Suppliers wishing to adopt the transitional arrangements must notify HMRC by 30 November 2015.
Where businesses are not entitled to adopt the transitional arrangements, the Brief sets out the terms on which HMRC will settle outstanding VAT liabilities.
A copy of Revenue & Customs Brief 10/2015 is available to read here.