Zero rating for children’s colouring and dot-to-dot books

From 1 April 2017, colouring and dot-to-dot books will qualify for zero rating provided the content is suitable for sale to children under 18 years old. Where such books are marketed as suitable for adults; or are held out for sale with other adult books and/or not appropriately marked as suitable for children; or  contain certain specified images, they will be standard rated.

HMRC’s new policy is outlined in Revenue and Customs Brief 17/2016 and further information is given in an update to VAT Notice 701/10. HMRC does not intend to seek to recover VAT on sales of colouring and dot-to-dot books made prior to 1 April 2017 where the content was suitable for children, regardless of how the books were marketed or held out for sale at the time. HMRC will consider claims for overpayment of VAT (under the 4 year time limit) in cases where VAT has been declared on colouring books suitable for under 18 year olds, or where HMRC has raised an assessment for such.

Publishers, wholesalers and retailers will now need to review their current positions, and how they will market and hold out colouring and dot-to-dot books for sale to reflect HMRC’s new policy from 1 April 2017. 

If you would like to discuss any of the above information further, please contact your usual Moore Stephens contact.

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