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HMRC have been criticised for failing to publish guidance on a VAT measure that affects direct mail sent by charities.
The Revenue ruled last summer that the printing and delivery of charity mail packs should not be zero rated – which led to complaints and confusion in the charity and printing sectors, forcing the department to accept that its guidance was unclear.
HMRC have been criticised for failing to publish guidance on a VAT measure that affects direct mail sent by charities.
The Revenue ruled last summer that the printing and delivery of charity mail packs should not be zero rated – which led to complaints and confusion in the charity and printing sectors, forcing the department to accept that its guidance was unclear.
Tax officials agreed to delay the ruling’s 1 October 2014 implementation until 1 April 2015 and sought comments on newly drafted guidelines from the Charity Tax Group (CTG), which raised concerns about inaccuracies and called for a further postponement of the implementation.
HMRC refused, insisting taxpayers affected were made aware of the situation in a department letter issued in December, which the tax authority later said contained its confirmed VAT position.
CTG chairperson John Hemming castigated the Revenue for failing to resolve “outstanding concerns that a retrospective concession that we negotiated has been narrowed to exclude unaddressed mailings and data correction services, in direct contradiction to earlier promises.
“It is unsatisfactory that charities have to operate according to new rules from 1 April without formal notice of their responsibilities.”
The CTG has advised its members to stop treating charity mail packs as a composite zero rated supply of delivered goods, and to consider instructing print companies to arrange for delivery services to charity’s targets to be provided as an agency disbursement.
