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I am an agent publishers selling reproduction rights

Customer Question

I am an agent for book publishers selling reproduction rights to other publishers. I invoice and collect the rights income and then hand over 85% to the copyright holder. I invoice the copyright holder 15% for my services.
At which point does VAT get involved in this process. I am registered for VAT in UK
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.

Hello, I'm Keith and happy to help you with your question.

Under normal VAT accounting every invoice you issue should have VAT added at the standard rate (20%). The service you provide, although within the book trade, is not one of the categories where the rate of VAT would be zero. The 85% you hand over to the copyright holder is, of course, 85% of the net sum billed before you added your VAT. If the copyright holder is registered for VAT then they should issue you with a VAT invoice to enable you to reclaim any input tax.

I would recommend that you have a look at VAT Notice 701/10. You will find it at:

https://www.gov.uk/government/publications/vat-notice-70110-zero-rating-of-books-and-other-forms-of-printed-matter/vat-notice-70110-zero-rating-of-books-and-other-forms-of-printed-matter

I would also be inclined to consult your local VAT Office for further guidance. Although VAT 701/10 does indicate that your services are standard rated there may be precedents which will allow it to be taxed at the zero rate.

I do hope I have shown you a way forward with your conundrum.

Customer: replied 2 years ago.

Just for clarification, are you saying that the invoice I raise on the buyer in my name for rights as well as my 15% commission fee invoice thereon are subject to VAt at standard rate.

Expert:  bigduckontax replied 2 years ago.
Yes I am at this stage. The rights and the commission would be aggregated for VAT purposes. This is why I would urge you to consult your VAT office as some precedent may exist out with VAT Notice 701/10 which will enable your activities to be zero rated.
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3621
Experience: FCCA FCMA CGMA ACIS
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Expert:  bigduckontax replied 2 years ago.
Thank you for your support.
Customer: replied 2 years ago.

Sadly there is no reference to the sale of book rights or permission in

VAT Notice 701/10. Is there a Vat notice on rights per se?

Expert:  bigduckontax replied 2 years ago.
I was unable to find one which is why I suggested that to approach your VAT office for guidance might be appropriate. I have always found their staff most helpful.

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