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HMRC releases new guidance on direct mail

HMRC yesterday published updated versions of its guidance on VAT on direct mail in a move which the Charity Tax Group says will “provide certainty and clarity for charities”.

HMRC has changed its position on VAT and direct mail, which means many contracts which charities believed were zero-rated for VAT purposes are actually standard-rated. This means that up to £400m of charity direct mail could face additional VAT charges of 20 per cent.

However in addition to publishing guidance, HMRC has confirmed today that it will extend a transitional period during which it will not charge 20 per cent VAT on direct mail. This means its new rules will not apply to mail sent by charities before the end of July.

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