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START UP A LOCAL TN

APPENDIX 3

VAT and local Talking Newspapers

In 1986, the VAT regulations were changed so that recording and replay equipment, purchased by organisations such as TNs, for  use for or on behalf of partially sighted people, became zero rated. The servicing and spare parts for such equipment is also free of VAT.

mixers, cassette machines (both for master recording and supply to listeners), Minidisk and CD machines, microphones, microphones stands, headphones, loudspeakers, high-speed copiers, computers, CD copy stacks.

However, consumables such as cassettes and CDs are not VAT free!

To obtain the equipment VAT free, the TN has to supply the equipment supplier with a declaration to the effect that the equipment is being supplied for use by the organisation on behalf of partially sighted people. The TN should quote its charity number, but it should be noted that, if your TN isn't a
registered charity, the IRC&E will accept TNFs charity number on the declaration form.

Charities and voluntary bodies caring for the blind and the severely visually impaired can obtain zero-rating for purchases of sound recording and reproduction equipment (or parts and accessories for such equipment) that has been designed or specially adapted for recording or reproducing speech for the
benefit of such persons. In the case of reproduction equipment, zero-rating will not apply where the equipment is available for use by anyone other than the blind or severely visually impaired. The zero-rating also covers radios and cassette recorders purchased by charities for free loan to the blind, and
the repair or maintenance of any equipment mentioned in this paragraph.

Note that although this Notice 701/1 is titled Charities in this section it specifically refers to voluntary bodies as well.

Be wary.

Suppliers who regularly deal with talking newspapers will be aware of the zero rating for equipment but you may have problems with other suppliers. In theory VAT is a simple tax but the practical application of it requires a mass of regulations and interpretations.

The treatment of food gives many good examples. Most food is zero rated but confectionery is standard rated and so the VAT Notice on food includes useful examples like stating that the following is standard rated - "Gingerbread men decorated with chocolate unless this amounts to no more than a couple of dots for eyes". And of course an Aylesbury duck is zero rated but a Mandarin duck standard rated!

This interpretation is funny until it happens to you - is the computer used for recording actually zero rated recording equipment or a normal standard rated computer? Is a CD player used to put music on recordings a zero rated part of recording equipment or a stand alone item? Unfortunately the answer may vary between VAT offices and you need to be aware that if HM Customs and Excise believe that a supplier has got it wrong then they may look to them, not you, to pay the VAT.

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