VAT law is just like a Sherlock Holmes novel. Firstly, there was the great saga of the Jaffa Cakes, followed by the grand mystery of the “Gingerbread Man”. More recently there has been the strange case of the “Snowball”. All these, dealt with in earlier articles, related to the VAT rate charged on specific food items, and you might be excused for stifling a yawn or two. However, the VAT office has decided to spread its wings and we now have the earth shattering policy statement on “adult colouring books” and “adult dot-to-dot books”.
Books are generally zero rated. However, the main definition of a book is something designed to be read or looked at. As colouring books and dot-to-dot books are designed to be completed they clearly do not fall into this category. However, zero rating is extended to also cover children’s picture and painting books. However, non-children’s picture and painting books are not covered and therefore should be subjected to VAT at standard rate.
It is clearly essential, in order to protect the government coffers, to clarify this immensely important point. Therefore, after making substantial consultations on this issue, and having carefully considered all of the implications for the future economic stability of the country, the tax office have issued their proclamation that from 1st April 2017 standard rating should apply to all colouring books and dot-to-dot books that:
- Contain adult images depicting profanity, violence or illegal acts, or
- Are held out for sale with other adult books unsuitable for persons under 18 years old, or
- Are marked as suitable for adults.
This is currently only the tax office’s interpretation of the law and has not yet been tested at tribunal. We may yet see this interpretation challenged in a mouth-watering hearing similar to the scintillating and tasty “Hot Pies” case. I don’t know about you but I don’t think I will be losing sleep over this!
For more information about our VAT services