Help To Settle An Argument please...VAT


Active Member
My boss and I are having this ongoing argument about VAT on artwork. My stance is that it should be paid; end of. His belief is that if you are doing artwork for a leaflet you don't have to charge it since leaflets are Zero Rated.

When I was freelancing a while back my accountant advised me to charge VAT on artwork for everything regardless of what it is for given that it is a "product" / service in its own right.

Any insights?

Thanks :icon_biggrin:
In most instances printed leaflets are zero rated so no vat is applicable, design work is a service and hence attracts vat...that's my take on it.
Thanks :icon_thumbup:

I think he is of this opinion because our ordering system doesn't automatically apply it BUT it goes through invoicing as a bespoke product therefore it defaults to zero rating.

Oh well let's hop he doesn't get a VAT inspection :icon_eek: yet :icon_biggrin:
Your boss is correct though to an extent that is really determined by the principal supply.

If the principal supply is for a zero rated item then ancilliary services that go with it can follow the rating of the principal supply. Design can be considered an ancilliary service and I think would always be considered so when in conjunction with leaflet printing. By the same token, a print finisher can determine the VAT status of his service by the end use of the prduct he's making though not all do (my incumbent does though).

Of course this is all "voluntary", you could zero rate one and full rate the other; my own preference is to zero rate everything provided I can do so by the VAT rules.

All that said though, ring HMRC and you'll get two or three different stories, but examples to illustrate the above are in the VAT booklet that covers zero rating on printed goods.
Design work on its own - VAT. As a component - VAT. With a finished product - depends on the item.

e.g. As Boss says - design and production of a flyer (no response mechanism) - no VAT. Design only - VAT.
Might I just add...

If you are ever in doubt call the VAT office. Get a ruling. it may take some time, but they are legally obliged to reply with an answer and what they say goes.

If in doubt though, I'd charge VAT
As Peter and Boss say - design on its own - VATable. Design as part of the finished item - then dependant on item.

All the VAT inspections I've been through we knew more that the VATman about print/design.
Ok well just to throw one more into the mix... what IF you are doing a design package (e.g. logo, leaflet, letterhead) would you charge VAT on the whole thing? :icon_scared::icon_lol:
You need to be more specific:

A design package - VAT.

Finished printed product - leaflet No VAT (dependent on content). Remainder VAT (assuming logo is not just for leaflet).
I mean, say a customer has come to you for a bit of corporate branding and you have quoted them a single price for the artwork (that includes logo design, setting up letterheads, cards & comp slips and the design of a leaflet).