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HMRC internal manual

VAT Books

Books: Printed matter supplied with services: Printed matter used to supply discount services


You may be asked to consider books of discount vouchers or similar publications. Such publications often contain a number of discount vouchers, plus details of establishments where the vouchers may be used. Here you need not consider in any depth the exact make-up of a book, or the percentages devoted to vouchers as opposed to text. The important point to establish is where the value of the publication lies. If the publication has some value as printed matter in its own right, you will have to at least make some allowance for this element, which may be zero-rated if the publication otherwise qualifies as a book, booklet, and so on. However, if a person would only really buy the publication for the discounts which it contains, there is one standard-rated supply of discount services, to which the printed matter is incidental.

By considering the following questions, you should be able to reach a balanced decision.

  • Is it possible to physically separate the vouchers from the guide, and if so, are the two parts ever offered for sale separately?
  • How is the guide promoted - is the discount aspect stressed?
  • Does the price increase if more vouchers are supplied?
  • What is the historical background - has the guide ever been supplied independently with no vouchers, or is this an entirely new venture?

In decided cases, we have viewed the supply of these discount voucher books as one standard-rated supply of services. However, you should make a reasoned judgement and not apply this policy to the extremes. For example, if a guide which had been issued for a number of years without discount vouchers, was issued in a particular year with a number of discount vouchers attached, we would tend to see the vouchers as incidental. The supply of the guide could thus still be zero-rated. If, however, this well-established guide was issued with an option to buy a number of vouchers at extra cost, we would tend to see a standard-rated supply of the vouchers, and a zero-rated supply of the guide.

Tribunal cases

There are three Tribunal cases which have dealt with this issue.

  • In Status Cards Ltd (LON/74/102) (VTD 128) a discount card was supplied as one package along with a directory which listed outlets where the card might be used. The Tribunal ruled that an apportionment should be made to allow for the zero-rated directory.
  • In Graham Leisure Ltd (LON/81/329) (VTD 1303) one booklet contained a mixture of vouchers and publicity concerning participating entertainment outlets. The Tribunal noted that the vouchers constituted the minority of the publication in percentage terms; but still ruled that the supply was wholly one of standard-rated discount services.
  • In Interleisure Club Ltd (LON/91/1681X) a leisure guide contained both discount vouchers and information about hotels and restaurants where they might he used. Here, the Tribunal seems to have put emphasis upon the pricing and advertising of the guide, which promoted the discount aspect. Again, the decision was that there was one supply of standard-rated services.

If you have considered the points above but results are conflicting, you may find it helpful to consult these summaries, as they demonstrate the issues to which the tribunals have given most weight.