7.2% VAT on books?

I bought a book at a High Street discount retailer. The only special thing about the book is that it has a holographic printed cover, but otherwise it's a normal book. According to the receipt, the VAT content that was included in the price and is at 'Rate M' which is 7.20%. The item was 5.00, which includes 34p VAT (which I make to be 6.8%).
According to the HMRC guidance on what is and isn't a book, things can be either zero-rated (bona fide books) or standard-rated (lots of things that apparently aren't books, like address books, biorhythm charts, rent books, temperature charts and wills). But I've never heard of a special rate of VAT of 7.2%.
I don't think the cover is being accounted for separately to the book, because HMRC say: "The standard-rated item may be ancillary to, or an integral part of, the supply of zero-rated printed matter. The resulting supply is a single, zero-rated supply. (However, covers, cases and similar articles not separately accounted for are already zero-rated under Item 6 of Group 3, Schedule 8 of the VAT Act 1994.)"
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Anyone have any ideas what's going on here?
Cheers, Theo
Reply to
Theo Markettos

You have to calculate it properly. 34p is about 7.2% of the ex-VAT price (some £4.66), and 6.8% of the VAT-inclusive price. VAT applies on the former.
But you're right it is an odd rate, and I have no idea why it is. (I was hardly aware that there was no VAT on books; why not?)
Did you ask the retailer? It's not inconceivable that their point-of-sale system has been set up wrongly!
Reply to
BartC
I think it might be a flat rate VAT schemes combined with the option to round down. The current rates
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include 7.5% for "Retailing that is not listed elsewhere". Assuming the net price was 4.66 then 7.5 per cent is 34.95 pence. But IIRC there is the option to round down. So that gives 34p. QED ;) But wd a High St retailer have a low enough turnover to be within the scheme?
Reply to
Robin
The flat rate VAT scheme requires charging normal VAT. The 7.5% (referred to above) is just the 'nominal' rate at which VAT is a percentage of turnover that is be paid to HMRC.
It looks like the bookseller is confused!
Reply to
brightside S9
Ahem, I know that so patently failed to engage the only other pair of surviving neurons.
While I *certainly* was :((
Reply to
Robin
My initial reaction was that, since you bought it at a discount shop, this might have been a book imported in bulk from a régime that charges VAT on books. I don't know what their VAT policy is, but perhaps it was originally from Ireland, for example. I've not heard of such a special rate in the UK for 'real' books, which have always been zero-rated. Any attempt to impose VAT on books would result in howls of it being "a tax on learning".
Reply to
Charlie

But why would the receipt specifically say 7.2%? Unless the OP added that bit incorrectly.
As for the actual net price, it would be a coincidence if the sales price would be exactly £5.00, even with a bit of rounding on the VAT calculation. It's more likely the net price was adjusted first to end up with a nice round figure after VAT (usually ending with .99 though.)
Reply to
BartC
Here's what it says on the receipt:
The Works 31-33 Fitzroy Street Cambridge CB1 1ER Tel: 01223 363562 VAT Reg No: 555 2619 34
SALE 521 1 188954 25/09/2011 14:10
Today you were served by ELLA
384 3D Science 9781848103023 1x 5.00 5.00 --------- TOTAL ITEMS 1 5.00 --------- Cash £5.00
VAT INCLUDED IN ABOVE TOTAL AMOUNT
RATE M 7.20% 0.34 IN 5.00
[barcode]
Thank you for shopping at The Works See us online at
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I could of course go and remonstrate with the shop. But I doubt 'Ella' would be able to advise me on the finer points of VAT regulations. And I don't actually want my 34p back, I'm just curious how it's been worked out.
Theo
Reply to
Theo Markettos
wrote:
I'm curious, too. It would be worth getting in touch with the shop to alert them to the problem.
There's no 7.2% VAT rate but if there was they have calculated it correctly.
Reply to
Peter Saxton
In article , Robin writes
Similar comedy moments can be had by asking Avon (the cosmetics outfit) for a VAT invoice.
Reply to
fred
But maybe all the customers have been charged VAT incorrectly, in some cases rather more than 34p.
So speaking to the shop might be useful. But then, other customers can read their own receipts and make their own enquiries too.
Reply to
BartC

It looks like the shop sets the selling price after VAT.
This would mean that the shop would be paying too little VAT to HMRC. The VAT return should give enough information to put any competent organisation on alert.
Reply to
Peter Saxton

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