VAT update: Charity direct marketing services


Written by: Alan Pearce

Further to the articles in our October 2014 and February 2015 Charity Review, Her Majesty’s Revenue & Customs (“HMRC”) has now published detailed guidance on the VAT liability of direct marketing services effective from 1 April 2015.

In their revised notice 700/24 "Postage, delivery charges and direct marketing", they have confirmed that a single supply of direct marketing services is standard rated, even where a significant value of the contract relates to printed material. This would typically be zero rated if supplied on its own.


Standard rated marketing services include addressed or unaddressed door drops, or inserts in newspapers and magazines of printed matter, that include any of the following:

  • Posting or arranging the posting of the marketing material
  • Analysis or manipulation of data for strategic
  • marketing purposes
  • Purchase or rental of third part mailing lists
  • Analysis of own customer data to produce reports on campaign results


However, HMRC go on to say that printed material supplied separately can still be zero-rated and have provided two examples to illustrate the point:

  • An example of a single supply occurs where a supplier prints leaflets for a charity and, as part of the contract, amends the charity’s customer data so that addresses and postcode details are corrected. This is a supply of zero-rated goods.
  • An example of a multiple supply occurs where a supplier provides marketing strategy advice to a charity and offers the option, under a separate contract, of printing leaflets. These are multiple supplies, one of standard rated marketing services and one of zero-rated goods.


It appears that there is still scope for obtaining zero rating of printed advertising material, providing that the contractual arrangements are correctly structured. It will be important for charities to agree terms with its suppliers to ensure that any printed material is supplied separately and cannot be deemed ancillary to, or part of, a single taxable supply.

For more information, please contact Alan Pearce or your usual Blick Rothenberg contact.