The Daily Mail in the United Kingdom reports a three-year battle with over whether a photo book is really a “book” may cost more than £1million in tax revenue after a bizarre three-year legal case over whether a printed photo-book of personal snaps is really a book.
A tax court has ruled HM Revenue & Customs should not have charged photo-processing firm Truprint £545,800 in value-added tax (VAT) for selling the printed and bound books of favorite pictures which can be ordered online. The albums have now been classified as books – meaning they should have been zero-rated.
“Tax bosses will have to repay the £545,800 to Truprint to cover the tax years 2006 to 2009. They must also repay their own and the company’s legal costs, totalling an estimated £500,000, plus additional VAT payments of tens of thousands of pounds made by Truprint to cover the period 2009 to 2011,” the report said.
Before Truprint took on the tax chiefs, the revenue officehad insisted photo-books were not the same as other books.
Once the electronic file is created, pages are printed and bound in the same way as book manufacturing. In a 19-page judgment last week, London VAT Tribunal Judge Roger Berner ruled the vast majority of Truprint’s photo-book products could be classed as books because there is content printed inside.
Truprint said its business and 350 jobs at its plant at Newton Abbot, Devon, had come under threat because of the burden of VAT payments. It claimed to have lost business to European rivals paying lower VAT rates.