Colouring Books / Dot-to-Dots & VAT

The increase craze for adult colouring books has resulted in HM Revenue and Customs (HMRC) publishing Revenue and Customs Brief 17 (2016): VAT – treatment of colouring and dot-to-dot books. The brief sets out HMRC’s policy on the VAT treatment of colouring books and dot-to-dot books aimed at adults. Children’s colouring books remain zero rated.

HMRC accept that colouring or dot-to-dot books are zero-rated for VAT purposes, unless one of the following applies. The books are:

  • marked as suitable for adults or grown-ups;
  • held out for sale in retail shops together with other adult books that are unsuitable for children or are not appropriately marked as suitable for children when for sale on a website;
  • contain images reflecting profanity, pornography, violence and illegal acts.

If the book meets any of the three conditions above, it will be a standard rate supply. This policy will come into effect on 1 April 2017. This will allow suppliers to an opportunity to use up existing stocks as well as to review how they intend to market the books in the future.

HMRC feels that many of the colouring books that were zero rated prior to 1 April 2017, could have meet the conditions to be zero rated had the suppliers understood the rules. Therefore, HMRC have decided not to seek to recover of VAT on adult colouring and dot-to-dot books prior to 1 April 2017.

Where a business has declared VAT or where HMRC has raised an assessment of VAT for colouring books suitable for children under the age of 18 years old, it is possible to submit repayment claims to HMRC.

Should you wish to discuss how this clarification of HMRC’s policy will affect your business/clients, please do not hesitate to contact Baldwins VAT specialist Jane Deeks.

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