Hi
As a business should we charge VAT on printing costs to a client.
We are not a printing company, we are a design agency that sourced the printing and are charging this on to the client. There is no VAT on the printing from the supplier so we weren't sure if we should charge VAT on our invoice (seems wrong).
Any help would be appreciated.
Thanks
Ali
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Replies (2)
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Disbursement
If you show it separately on your bill marked as a disbursement and charge the exact amount you were billed, you will not have to charge VAT. Presumably in the normal course of business you would simply supply the documents to the client in electronic format. The printing cost would then be a customer cost you have paid on their behalf in this case, with you simply seeking reimbursement of this.
If you do not show it separately, or have any sort of markup on the printing cost, then output VAT has to be charged on the full amount. The printing costs are treated as part of your standard-rated design work.
What's the supply?
If you've designed a brochure, leaflet or pamphlet and then had, say, 1,000 printed which you're then going to pass on to your customer, then just like the printer, you've got a zero-rated supply.
If you have received a supply from the printer that has been subsumed into some larger supply that's standard-rated and the printing cost is just a component in your calculation of your price, then the fact that the printer zero-rated their supply to you is irrelevant.
The third option is, as stepurhan says, that you incurred the printing cost as your customer's agent, and it's just a disbursement.
The devil's in the (mostly absent) detail, unfortunately.