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HMRC internal manual

VAT Books

Books: Processes leading to the production of printed matter: The role of sub-contractors

Introduction

A printer with a contract to the final customer to supply zero-rated printed matter may zero-rate any preparatory work or post-production services, even if sub-contractors have been employed to perform some parts of the production process.

However, a sub-contractor can only zero-rate preparatory or post-production work when these are supplied in conjunction with zero-rated printed matter. For example, where a sub-contractor carries out typesetting only, his charge must be standard-rated; but if he goes on to produce zero-rated printed matter, he can zero-rate all of his charges to the main printer.

There will therefore be occasions when a sub-contractor will need to charge VAT for his contribution to the production process, although the main printer may zero-rate the same supply to the final customer. The following table provides an illustration of one such situation.

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A possible situation illustrating VAT liability at different stages of the production process

### Supply ### VAT treatment
(ZR = zero-rated, SR = standard-rated)  
   
  ## Introduction {#IDAAHDEH}

A printer with a contract to the final customer to supply zero-rated printed matter may zero-rate any preparatory work or post-production services, even if sub-contractors have been employed to perform some parts of the production process.

However, a sub-contractor can only zero-rate preparatory or post-production work when these are supplied in conjunction with zero-rated printed matter. For example, where a sub-contractor carries out typesetting only, his charge must be standard-rated; but if he goes on to produce zero-rated printed matter, he can zero-rate all of his charges to the main printer.

There will therefore be occasions when a sub-contractor will need to charge VAT for his contribution to the production process, although the main printer may zero-rate the same supply to the final customer. The following table provides an illustration of one such situation.

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A possible situation illustrating VAT liability at different stages of the production process {#IDAQHDEH} | SR supply of preliminary services. |

| Publishing house agrees to supply 10,000 complete booklets to the retailer, at an inclusive price of £30,000. Publishing house employs sub-contracting companies as follows. |   | | ## Introduction {#IDAAHDEH}

A printer with a contract to the final customer to supply zero-rated printed matter may zero-rate any preparatory work or post-production services, even if sub-contractors have been employed to perform some parts of the production process.

However, a sub-contractor can only zero-rate preparatory or post-production work when these are supplied in conjunction with zero-rated printed matter. For example, where a sub-contractor carries out typesetting only, his charge must be standard-rated; but if he goes on to produce zero-rated printed matter, he can zero-rate all of his charges to the main printer.

There will therefore be occasions when a sub-contractor will need to charge VAT for his contribution to the production process, although the main printer may zero-rate the same supply to the final customer. The following table provides an illustration of one such situation.

Top of page

A possible situation illustrating VAT liability at different stages of the production process {#IDAQHDEH} | SR supply of preparatory work. |

| ## Introduction {#IDAAHDEH}

A printer with a contract to the final customer to supply zero-rated printed matter may zero-rate any preparatory work or post-production services, even if sub-contractors have been employed to perform some parts of the production process.

However, a sub-contractor can only zero-rate preparatory or post-production work when these are supplied in conjunction with zero-rated printed matter. For example, where a sub-contractor carries out typesetting only, his charge must be standard-rated; but if he goes on to produce zero-rated printed matter, he can zero-rate all of his charges to the main printer.

There will therefore be occasions when a sub-contractor will need to charge VAT for his contribution to the production process, although the main printer may zero-rate the same supply to the final customer. The following table provides an illustration of one such situation.

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A possible situation illustrating VAT liability at different stages of the production process {#IDAQHDEH} | ZR supply. The act of stitching produces ZR goods. The printing, cutting & collating are supplied in conjunction with ZR printed matter & may also be ZR. |

| ## Introduction {#IDAAHDEH}

A printer with a contract to the final customer to supply zero-rated printed matter may zero-rate any preparatory work or post-production services, even if sub-contractors have been employed to perform some parts of the production process.

However, a sub-contractor can only zero-rate preparatory or post-production work when these are supplied in conjunction with zero-rated printed matter. For example, where a sub-contractor carries out typesetting only, his charge must be standard-rated; but if he goes on to produce zero-rated printed matter, he can zero-rate all of his charges to the main printer.

There will therefore be occasions when a sub-contractor will need to charge VAT for his contribution to the production process, although the main printer may zero-rate the same supply to the final customer. The following table provides an illustration of one such situation.

Top of page

A possible situation illustrating VAT liability at different stages of the production process {#IDAQHDEH} | SR supply of post-production service in isolation. |

| ## Introduction {#IDAAHDEH}

A printer with a contract to the final customer to supply zero-rated printed matter may zero-rate any preparatory work or post-production services, even if sub-contractors have been employed to perform some parts of the production process.

However, a sub-contractor can only zero-rate preparatory or post-production work when these are supplied in conjunction with zero-rated printed matter. For example, where a sub-contractor carries out typesetting only, his charge must be standard-rated; but if he goes on to produce zero-rated printed matter, he can zero-rate all of his charges to the main printer.

There will therefore be occasions when a sub-contractor will need to charge VAT for his contribution to the production process, although the main printer may zero-rate the same supply to the final customer. The following table provides an illustration of one such situation.

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A possible situation illustrating VAT liability at different stages of the production process {#IDAQHDEH} | Entire charge ZR as a supply of booklets. |