Package test and its use for fundraising items

By concession, zero rating can apply to a package of standard rated and zero rated printed matter:

  • where there are more zero rated than standard rated items, or
  • where there are equal numbers of zero rated and standard rated items and the value of the zero rated items is the greater

Where there is a supply of a package to a charity some items connected with collecting monetary donations can be treated as zero-rated for the purposes of the package test. The items must meet the criteria set out in Notice 701/58 Charity advertising and goods connected with collecting donations.

  • Letter appealing for donations – Zero-rated
  • Printed envelopes for use with appeal letters – Zero-rated
  • Money collecting envelopes – Zero-rated
  • Stickers – Standard-rated for the package test
  • Money collecting boxes made of card – Zero-rated
  • Any item not made of paper or card – Package test cannot be used

For further details see paragraphs 6.5 and 6.6 of HMRC VAT Notice 701/10: zero-rating of books and other forms of printed matter.

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