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HMRC internal manual

VAT Books

Books: What kinds of article are eligible?: Brochures and pamphlets (Item 1)

Physical characteristics

To qualify for relief as a brochure or pamphlet, an article will normally possess the following physical characteristics:

  • it will consist of either several pages that may be fastened together, or a single folded sheet;
  • it will be designed to be held in the hand and read.

There are a number of principal Tribunal decisions which have dealt with brochures.

  • In Betty Foster Fashion Sewing Ltd [1976] VATTR 229, a dress-making course packaged in a stiff paper folder was ruled to be eligible for relief as a brochure. However, this was very much an exceptional decision, which relied on the function of the article rather than its physical characteristics. We would seek to resist its application to any other cases.

The above decision has since been qualified by the following cases:

  • The High Court decision in Odhams Leisure group Ltd [1992] STC 332 supported the view that a children’s activity pack enclosed in an envelope was not a brochure, stating that it would be over-stretching the meaning of the word brochure to attach it to these packs.
  • Infocard (LON/90/1314Z) (VTD 5732) considered information sheets on taxation matters, which were ruled not to be brochures. The Chairman specifically stated that the format of a brochure was vital in determining liability, and not the function.
  • In Hall of Names Ltd (LON/91/1256) (VTD 8806) the chairman considered the definition of brochure and pamphlet and concluded:

…it is necessary to have regard to the content and the purpose as well as the appearance to decide whether something is a brochure or a pamphlet. The characteristic mentioned in the dictionary definition that both should be stitched is obsolete. But the expectation is still that both would contain more than one sheet. In modern common usage a ‘brochure’ would ordinarily be understood as containing descriptive matter designed to sell some particular goods or services and commonly provided free. Similarly a ‘pamphlet’ is ordinarily a treatise or tract upon some particular subject of topical or current interest.

  • In Schusman [1994] (VATTR 120) the chairman defined what he considered were the essential features of a brochure, namely:

 

 

  • it must be more than one page, although one sheet folded to form, say, four pages, is acceptable;
  • it is usually attractively presented;
  • it may, but need not, be glossy;
  • it may, but need not be, or contain, an advertisement;
  • it is usually coloured;
  • it usually has printed text as well as illustrations;
  • it may have inserts such as vouchers, forms, or as here, stamps;
  • it has an appearance and purpose which go beyond mere utility;
  • but it is not mere entertainment.

The chairman concluded that the items in question contained sufficient of the above features to qualify as brochures.

Function

An article will not be eligible for relief if:

  • its significance lies in parts for completion or detachment, or
  • it does not convey information by means of text.

Its significance lies in parts for completion or detachment

In Public Notice 701/10 Zero-rating of Books etc we state that brochures or pamphlets with more than 25% of their total area for completion or detachment must be standard-rated. This is an easy way for the trader to judge liability, but it has no basis in law and can sometimes produce an unfair result. Traders must be allowed to judge liability by the 25% rule, but if they feel this has produced an unfair result, you should consider each case on its merits. VBOOKS3120 provides guidelines.

It does not convey information by means of text

As brochures are primarily advertising vehicles, they will often contain numerous illustrations. However, there must be some thematic text to link these illustrations in order for zero-rating to be accepted. For example, a collection of paint samples with only the names and numbers of the particular shades is not a brochure, although it might possess the right physical characteristics.

Wallets

If your article is not disqualified on the grounds that its significance lies in parts for completion or detachment, or on the grounds that it does not convey information by means of text, you will need to consider the significance of any fixed flap or pocket. Some brochures contain several sheets of text, but also have a fixed flap or pocket into which leaflets or business cards may be inserted. These may be zero-rated, as we accept that the fixed flap or pocket does not alter the primary function of the brochure, which is to convey information.

However, where a wallet-type brochure consisting of a single sheet contains a fixed flap or pocket, and its main purpose is the carrying of other papers, it is a standard-rated article.

In the case of wallets with inserts, you should always judge the qualities and function of the wallet itself, not the combination of the wallet and its contents. A wallet containing zero-rated reading material does not become a brochure, with the folder acting as an outer cover. In these circumstances, we view the wallet as a means of creating a package of printed matter. Such packages may be dealt with in a number of ways. You will find details in VBOOKS8000.

Ways in which an article which has failed the tests in VBOOKS3200 may still qualify for zero-rating

  • Articles that convey information by means of geographical representations may be eligible for zero-rating as maps. See VBOOKS3800.
  • Articles which consist mainly of music may qualify under Item 4. See VBOOKS3700.