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Postage, delivery and direct marketing

Delivery

The supply of goods may involve also delivery charges, the VAT treatment depends on how the goods are supplied:-

  • Delivered with no additional cost – Vat is charged based on the liability of the goods themselves.
  • Delivery with charge – if delivery is included in the contract then Vat is charged based on the liability of the goods themselves.  This applies even when delivery costs are separately shown on the invoice.
  • Where delivery is not part of the contract/ or is invoiced for separately then this is a standard rated supply of services.

 

Direct mailing services

Direct marketing can comprise a range of goods and services which, depending on how they are supplied and/or combined, can result in different VAT liabilities being applied.

Direct marketing via mail (addressed or unaddressed, such as ’door drops’) or inserts in newspapers or magazines typically involves the production or acquisition of printed matter for distribution and any or all of the following services:

  • posting or arranging the posting of customer mail such as publicity, advertising material or promotional goods to many recipients, including unaddressed mail (known as door drops)
  • analysis or manipulation of data (either provided by the customer or sourced directly) for strategic or marketing reasons - for example, to target direct mail at specific groups based on geography, socio-economic factors or gender of recipients
  • purchase or rental of third party mailing lists, including for amalgamation with customer’s own lists
  • analysis of own and customer data to produce reports on campaign results and advice on strategy

When any of the services listed (or other marketing related services) are supplied with printed matter as a single supply, then that is taxable at the standard rate, as it is a supply of direct marketing services.

Where the printed matter and any services are supplied separately then that may comprise multiple supplies and each component is taxed according to its VAT liability.