Charities' DM costs could be cut through better VAT understanding
Howard Lake | 25 February 2004 | News
Adare Group, the provider of print, mailing, and data management solutions, says that major charities could save hundreds of thousands of pounds a year on their direct marketing campaigns if they better understood the complex VAT rules on mailing packs.
Adare Group says that its VAT mitigation programme recently helped a top-10 financial institution achieve cost savings of more than 10% on its £7 million+ marketing spend. By applying a ‘package test’ and invoicing the marketing materials as mail packs rather than individual components, Adare Group reduced the client’s VAT content by £750,000 per annum.
Ross Tague, Adare Group’s VAT expert, said: “Organisations that are not VAT registered – such as financial institutions, charities and government bodies – suffer VAT wholly as an additional cost. Within the print sector, and particularly where Direct Mail is concerned, Adare Group focuses on finding ways to reduce the VAT burden for these type of clients.”
Advertisement
The package test on mailing packs involves analysing the elements of a mailing pack and assessing their VAT status. If the number of zero-rated items within a pack outweighs the number of standard-rated items, then the whole pack is zero-rated.
Ross added: “Sometimes it takes as little as adding a leaflet to the mailing pack to completely remove VAT.”
About Howard Lake
Howard Lake is consultant editor of UK Fundraising. He founded the site in 1994 and successfully sold it in 2022. As director of Giving X Ltd he is exploring growing giving on a massive scale.
He is the founder of Fundraising Camp and co-founder of GoodJobs.