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HMRC internal manual

VAT Books

HM Revenue & Customs
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Books: What kinds of article are eligible?: Books and booklets (Item 1): Function

Articles which have some of the physical characteristics of books may nevertheless be standard-rated if their main function is not that of a book. Here are examples of articles which do not qualify for zero-rating:

  • articles not having characteristics of a book t;
  • articles whose significance lies in parts to be completed or detached.

Articles not having characteristics of a book

Certain items whilst having some characteristics of a book may not qualify for zero-rating because, for example, the pages are not printed or the quality of the pages are not like that of a book. The following are examples of articles which ordinarily fail this test, and are thus standard-rated:

albums containing collections of picture cards or stamps, where 25% or more of the album is set aside for the mounting of cards or stamps;

  • photograph collections such as wedding albums;
  • books of postcards;
  • books of posters or frameable prints (although these may be periodicals - see VBOOKS3500), also see photo books below;
  • books giving samples of types of carpet, paint, paper, etc.

You should not seek to apply the above to extremes. For example, sample books which give more textual information than merely the names and addresses of the trader and the names and numbers of the shade, pattern or quality of each sample may qualify for relief. You need to establish whether the text in your article has any value in its own right, or whether it is merely incidental to the pictures, stamps, or samples.

Where a book does contain text this can be in any language or in Braille.

Articles whose main significance lies in parts to be completed or detached

Some articles obviously fall into this category - for example traditional diaries, account books, or exercise books - and are thus standard-rated.

In the High Court hearing in Colour Offset ([1995] STC 85), heard in December 1994, Justice May ruled that the word book (and booklet) was limited to an object having the minimum characteristics of a book which was to be read or looked at. A blank diary or a blank address book was not, in the ordinary sense of the word, a book. Accordingly, the diaries and address books supplied by the company were not books or booklets within Item 1 and their supply should not be zero-rated.

Another tribunal, Scholastic Publications Ltd (MAN/95/2087) (14213), found that the supply of an item that had some of the characteristics of a diary was found on balance to be a book. The tribunal accepted the appellant’s evidence that the item was a play organiser book and that the item was more of an activity book for children than a diary. This decision was found on the facts of the case and the tribunal chairman accepted the reasoning in the Colour Offset judgement.

Hybrid items

You are more likely to experience problems with articles which have elements of either stationery or toys, plus a significant textual element. In the case of these hybrid items, you will need to decide where the main value of the item lies. A couple of tribunal decisions tackle this issue.

  • The Tribunal in W F Graham (LON/79/332) (908) ruled that a doll-dressing book could qualify for zero-rating under Item 1. This was because at the time of sale a recognisable book existed, even though large parts of that book were intended to be cut out. The cut-out parts were also considered to be subsidiary to the text, which formed a story in its own right.
  • Conversely the tribunal in Scholastic Publications Ltd (MAN/95/2087) (14213) ruled that the supply of a dinosaur action set should be standard rated as a toy. This case is discussed in VBOOKS3600.  

Articles that have more than one function

Some articles have more than one function. In such situations, an on-balance judgement must be made as to the primary purpose of the article. There have been two tribunals that have considered this matter.

  • Firstly, the tribunal decision in the case of London Cyrenians Housing (LON/95/3173A) (14426) ruled that an item which could be used both as a book and a calendar was principally a book. In this case the tribunal ruled that the addition of a calendar to the back of the book was to make the item more unusual and exciting and more attractive to the reader did not prevent the item being a book.
  • The more recent tribunal of The Book People Ltd (LON/02/1053) (18240) examined whether a story book designed to be assembled into a play house constituted either a book (or a children’s picture book) OR a toy. See VBOOKS3600, which discusses this case further.

School workbooks

Our policy is that where these are in question and answer format, the spaces provided for the insertion of answers is purely incidental to the essential character of the publication. They may thus qualify for zero-rating if they have the physical characteristics of books or booklets. This policy extends to examination papers in question and answer format (for example multiple choice), and to crossword and other puzzle books whether for adults or children. These will generally be zero-rated. However, where the main value of a school work book etc is in the parts to be completed, that article will be standard-rated.

Photo books

A photo book which has the characteristics of a book, such as several pages, a cover stiffer than its pages, is bound and designed to be read or looked at, will qualify for zero-rating as a book. It does not apply to books which contain photographic quality prints with spiral binding.

This follows the First-tier Tribunal decision in Harrier LLC ([2011] UK FTT 725(TC)), which found, based on the High Court ruling in Colour Offset, that a photo book could fall within the definition of a book under Item 1, Group 3 and be zero-rated.

The decision does not have any impact in circumstances where there is a predominate supply of services such as those where the customer is paying for and receiving photographic services that then result in the production of a ‘book’. An example of this is in the Tribunal decision of Risbey’s Photography Ltd, Digital Albums Ltd (decision number 20783) where it was found that Risbey’s provision of a wedding package which consisted of making arrangements for photography, taking and viewing of photographs and a wedding book displaying a selection of photographs, was a supply of services and not one of goods.

We consider that in these instances the photographic service is the dominant supply and that the wedding book is ancillary to the supply of the services. Accordingly, there is a single supply of standard-rated services.