Is there VAT on letters?

Why does it depend?

4.3 splits letters three ways and the wording is exact. Individual manuscript or typed letters are standard-rated, and so are collections of them if unbound or loosely bound, while permanently bound collections are zero-rated. If a stock or basic letter is supplied with an individual name or address added, by whatever means, that supply is standard-rated. But uncompleted stock letters may qualify as leaflets, as long as the part left for completion is no more than the recipient's name and address, a reference number and a signature. There is a separate route for charities: an appeal letter supplied to a charity can be zero-rated under an extra-statutory concession even when it is personalised.

What decides it?

Whether a name or address has been printed on it. That one step moves a stock letter to 20%.

How do I know which VAT rate applies to letters?

Each one is personalised with a name or address: 20% VAT. Same letter for everyone, blank except for name, address, reference and signature: 0% VAT. A charity's appeal letter asking for donations: 0% VAT.

Where does this come from?

HMRC VAT Notice 701/10, paragraph 4.3, HMRC's guidance on zero rating books and printed matter. See the notices we work from.

Some real jobs

• 5,000 identical letters, blank where the name goes0%

  An uncompleted stock letter, which may qualify as a leaflet.

• The same 5,000 mail-merged with each recipient's name20%

  A stock letter supplied with an individual name added is standard-rated, by whatever means.

• A personalised appeal letter for a registered charity0%

  Zero-rated to a charity under the concession, and HMRC says it does not matter whether the addressee's details are included.