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Where Taxpayers and Advisers Meet

VAT and zero rated items on same invoice

LD0121
Posts: 3
Joined: Tue Jul 05, 2016 5:52 am

VAT and zero rated items on same invoice

Postby LD0121 » Tue Jul 05, 2016 6:06 am

I am a graphic designer, VAT registered. When I do a design only job I charge VAT as normal. Sometimes I also buy the print for a job. When I buy print that is zero rated does that zero rate then apply to the whole job that I am invoicing including my design bit or should I charge VAT on my design bit and keep the print as zero rated on the same invoice?

eg
Combined invoice
Design & Print - zero rated for the whole invoice ?

OR

Design - 20% VAT
Print - zero rated
on the same invoice

Thanks

absolutevat
Posts: 38
Joined: Wed Jul 01, 2015 3:28 pm

Re: VAT and zero rated items on same invoice

Postby absolutevat » Tue Jul 05, 2016 3:14 pm

Where a supply is made that consists of both zero rated and standard rated elements, you must consider whether this is seen as a single or multiple supply. I.e is one element significantly higher in value than the other, or is one clearly ancillary to the other?

If it is a single supply, it is the VAT rate of the predominant element which is used. If it is a multiple supply, you will need to apportion the VAT correctly.

What exactly is the zero rated item-does this definitely meet the requirements for zero rating?

LD0121
Posts: 3
Joined: Tue Jul 05, 2016 5:52 am

Re: VAT and zero rated items on same invoice

Postby LD0121 » Tue Jul 05, 2016 4:38 pm

The zero rated item is magazine print, so the printer invoices me and its zero rated. I then invoice my client for the print cost and the design work that I did.

jpcentral
Posts: 924
Joined: Wed Aug 06, 2008 3:28 pm
Location: Loughborough
Contact:

Re: VAT and zero rated items on same invoice

Postby jpcentral » Tue Jul 05, 2016 5:37 pm

This is an area where the guidance can be interpreted in different ways so a definitive answer may not be possible.

I would start with the question of whether your customer is VAT registered and therefore able to reclaim the VAT. If the customer can reclaim VAT, just charge it for safety because HMRC cannot really argue with that.

If your customer isn't VAT registered you will have to look at it in the way described by absolutevat.
John Perry
Central Business Services
Loughborough
http://www.centralbusiness.co.uk

LD0121
Posts: 3
Joined: Tue Jul 05, 2016 5:52 am

Re: VAT and zero rated items on same invoice

Postby LD0121 » Tue Jul 05, 2016 6:00 pm

Thanks, it is a bit of an odd one... my client is on flat rate VAT so I don't think he can reclaim the VAT. I think I will charge my bit at 20% as you say HMRC can't really argue with that and I don't really want a future surprise if I get a VAT inspection :)


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