My client provides written translation services. She will receive a document to translate into various languages and after she has done her translation work she will have a number of copies printed in each language. The documents are brochures, which the printer zero-rates when he produces them for her.
Is her supply to the customer one of the zero-rated brochures or does the initial translation alter this?
HMRC’s policy on this is set out in Notice 701/10 (section 7) and in the manual VBOOKS4200 and these appear to be slightly at odds.
When the supply of printed matter such as brochures involves the supplier also carrying out specialist preliminary services or preparatory production services, whether they follow the zero-rating of the eventual product, or whether they are standard-rated depends on the extent of the contract.
Notice 701/10 states that where the service is of a specialist nature such as translation, then the service is always standard-rated, as is the initial translated document, as the goods are incidental to the service. Additional copies of that document may be zero-rated as long as they are in an eligible format and supplied at a price that covers only the cost of producing the extra copies plus a reasonable markup.
However, the manual differs, and indicates that where the contract from the outset is to provide a continuous process from preliminary specialist services to the supply ‘on a wide scale’ of zero-rated printed matter, then HMRC accepts that the preliminary specialist services will follow the liability of the goods, and in your client’s case be zero-rated.
Obviously, ‘on a wide scale’ is open to interpretation and a common sense approach should be used. A handful of brochures to be used in a meeting would be likely to still be predominantly the supply of standard-rated services with some zero-rated additional copies; whereas a box of 500 brochures for distributing to the public would be an overall zero-rated supply.
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This tax Q&A was published in January 2018 – please be aware that the information above may have changed in subsequent months. This note is written for the general interest of our clients and is not a substitute for consulting the relevant legislation or for taking professional advice.
(This content was originally produced by Croner Taxwise Limited and is reproduced with their permission)