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HMRC internal manual

VAT Books

Books: What kinds of article are eligible?: Children's picture books and painting books

Here we deal with books for children of a younger reading age, where pictures are the main component (picture books); or books which enable the child to indulge in activities which exercise the mind (e.g. painting books).

Physical characteristics

To qualify for relief under this item, we would usually expect an article to possess the following physical characteristics.

  • It must have several pages.
  • It must be bound, fastened or folded in a concertina fashion.
  • It must be printed on paper, cardboard, textiles or (in the case of bathtime books) waterproof plastic.

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Many children’s picture or painting books also involve other elements more akin to toys or stationery. You therefore need to establish the main function of your article and only allow zero-rating if it is that of a picture or painting book.

Children’s picture books

The main problem here is with pop-up, cut-out elements or moving parts. In some picture books with accompanying text, the reader is invited first to read and then to cut out an item from the story, and so the value remains in the book itself. These are eligible for zero-rating. However, in others the reader is mainly directed towards cutting out parts of the book, and following this, there is little left that could be considered to be a book. Such articles have only really adopted the format of a book as a convenient means of packaging the cut-out parts - their value is as a toy, and they are therefore standard-rated.

In Notice 701/10 we state that books with at least 25% of text other than assembly instructions may be zero-rated. This is an easy way for the trade to judge liability, but it has no basis in law and can 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, and decide whether your article is primarily a children’s picture book or a toy.

W F Graham (Northampton) Ltd (LON/79/332) (VTD 908)

The tribunal considered whether a cut-out doll-dressing book could qualify for relief. You may be interested in looking at this case as it clarifies the distinction between children’s reading books and children’s picture books. It also highlights the importance of the cut-out elements being subsidiary to the text.

Scholastic Publications Ltd

The tribunal in Scholastic Publications Ltd (MAN/95/2087) (VTD 14213) considered whether an action set consisting mainly of twenty four leaves which, except for three leaves of written instructions on the method of constructing pop out dinosaur models and diorama and three further pages of text, consisted otherwise entirely of pictures of models.

The tribunal chairman concluded that this supply was different from the supply made by W F Graham, as this supply was available for sale by the toy trade. The tribunal chairman concluded:

This is not a story book. It is a model-making toy. It would be evident at purchase that it was a toy and not a book nor even a children’s picture book or painting book. The text is incidental to the main purpose of the product and indeed is detached itself in two sections to form part of the models.

The Book People Ltd

The tribunal in 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. The tribunal decided that the product was a book (or a children’s picture book) and was zero-rated. The decision was based on the following facts.

  • The item had text with a relevant title and the text was relevant to the laminated sheets contained within the cover.
  • The item had the physical characteristics of a book, namely, the hard cover and spine and the attached numbered and turnable pages.
  • The text was significant. Although short and simple it was considered to be an integral part of the product. The text provided both a sequential narrative and a key to the pictures; and it informed the whole concept from first examining the pages then dismantling the product, then assembling the model and finally playing with the finished house and its contents.
  • The product could be reassembled back into a book.

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Children’s painting books

We interpret painting books as including most types of books which are designed to exercise a child’s mind other than by way of a traditional story. This includes books in which the outlines of pictures are copied or coloured in, puzzle books, dot-to-dot books and books which feature pictures onto which stickers are stuck or transfers are superimposed.

Zero-rating may be allowed if the main function of your article is as above. However, you should not extend it to the following.

  • Articles which include puzzles, pictures for colouring, and so on, but are mainly cut-out toys or board games. For example, we allowed relief for an activity book which included a text about a boy’s adventures, various activities involving stickers and drawings, and some cut-outs. We did not allow relief, however, for a Book of Board Games, which was merely an assemblage of board games in book form.
  • Articles which allow a drawing to be made outside the book itself. One example of this was a Snowflake Stencil Book - a collection of 16 stencils which children could draw through and thus create pictures of snowflakes on their own paper. We viewed this as a convenient means of packaging stencils (which would be toys if sold on their own), and ruled it to be standard-rated.
  • Articles which are primarily stationery for children to write on. For example, we did not allow relief for a book with a collection of pages, each featuring a small picture and an accompanying word such as astronaut, but with 90% devoted to space for the child to practice writing the word in. Here the main function was clearly to act as stationery.