The groups say there is currently ‘confusion’ in this area, which has resulted in ‘a disparity in tax treatment for the supplying companies (typically SMEs) and some financially crippling back tax assessments’.
The organisations say usual practice has been that the supply of printed marketing material has been treated as ‘a single supply of zero-rated printed matter’. However, they say this has recently been challenged by the Anti-Avoidance Group on a case-by-case basis.
The three groups are asking for clarification of the position to be included in the proposed Finance Bill.
Alex Hunter, finance director of the IPA, says, ‘We hope that by doing this the threat to companies of crippling back assessments is removed. There seems to have been a change in interpretation by HMRC that has neither been communicated clearly enough nor made explicit in law. It is imperative any confusion is cleared up so that companies can operate on a level playing field.’
HMRC was unable to comment at the time of going to press.