# V.A.T. on photographic services - 13.5% or 21%?



## Dinarius (24 Jun 2009)

Here is a link to the Revenue Commissioners paper on VAT in photography.

http://www.revenue.ie/en/tax/vat/leaflets/photography.html

To my untrained eye, it seems to deal with the supply of photographic goods rather than the supply of photographic services.

As with most commercial photographers, I charge by time (1/4 day, 1/2 day, full day etc...) and charge my expenses on top of that.

In a quarter day, I might take 2 usable images and, in an very complicated full day, I might only take the same 2 usable images. But, obviously, I will charge more for the latter.

For this reason, since I started out 25 years ago, I have always billed for time and materials separately. Thus, just like when you go and get your car serviced and receive a bill detailing the mechanic's time @ 13.5% and parts @ 21.5%, I too have charged time @ 13.5% and materials @ 21.5%.

Similarly, in the digital age, I am charging my time @ 13.5% and the delivery of files (either on CD or DVD, or by portable hard drive when there are too many of them) are charged separately @ 21.5%.

Needless to say, this makes a considerable difference to the bill and, since many of my clients are state institutions and not registered for VAT, I'd like it to stay this way.

The link above refers only to the "supply" of photographs and, while this makes sense in the wedding and social arena where you might be told you'll be given an album of 30 prints, it makes no sense whatsoever in the commercial arena where the client is paying for a service first and foremost. The physical nature of the way in which the images are delivered to the client is very secondary.

There are two schools of thought on VAT in the digital era, mine as outlined above and the "rate the entire invoice at 21.5%" approach.

I would be grateful for the views of others.

Many thanks.

D.


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## mathepac (24 Jun 2009)

I can't see anywhere in the Revenue site or documents where its allows for charging the time / labour element at 13.5% VAT.

You say that you "... charge by time (1/4 day, 1/2 day, full day etc...) and charge my expenses on top of that." Why is that different to an accountant / solicitor who charge VAT on professional fees at 21.5% and re-bill outlays?


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## Dinarius (24 Jun 2009)

mathepac said:


> I can't see anywhere in the Revenue site of documents where its allows for charging the time / labour element at 13.5% VAT.
> 
> You say that you "... charge by time (1/4 day, 1/2 day, full day etc...) and charge my expenses on top of that." Why is that different to an accountant / solicitor who charge VAT on professional fees at 21.5% and re-bill outlays?



Thanks for the reply.

Photography has always been ratable @ 13.5% (comparable to the car industry, as I wrote above), but they seem to be making a distinction with digital photography.

I agree, there doesn't seem to be any mention of the service element, just the goods.

D.

Edited: Two further points...........

1. Both the 13.5% and the 21.5% paragraphs are headed "The supply of goods and services......", but only the former mentions commissions - by which I understand the supply of a service. The 21.5% paragraph only mentions goods ratable at 21.5%.

2. What happens if someone asks for a unframed prints of the digital files (ratable @ 13.5%) in addition to a DVD of the files? As with the car mechanic example, it seems to me that unless you're itemizing the service and the goods separately, you have to charge both at the same VAT rate. But, which one?

D.


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## Gervan (24 Jun 2009)

See [broken link removed] and neighbouring items. There is a difference in whether the photographs are commissioned ( service being supplied) or not ( supply of goods).

I wonder if this service / supply also obeys the "two-thirds" rule, whereby if the supply of goods, or what is considered goods exceeds two thirds of the net invoice the higher Vat rate must be used. Otherwise the 13.5% would be correct.


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## Dinarius (25 Jun 2009)

Gervan,

Thanks for that. But, I'm still confused.

The link you quote above is headed: "Photography, Photographer's Services", but it then goes on to talk about "supplying goods". Moreover, it says that the goods are rated 13.5% unless they're digital, when they're 21.5%. Fair enough, but what if I supply a mix of the two?

It seems to me that the guidelines are constructed with over-the-counter services and cost-per-unit type goods in mind. It's very easy to understand that if I go to a one-hour-photo shop with a DVD of holiday pics for printing that I am charged 13.5% per print. Equally, if I go with a pile of old family photos that I want scanned and delivered to me on DVD, I must pay 21.5% on the digital images on the DVD. But, over the counter services are billed on a per unit (per print, per scan etc...) basis, not time plus materials.

In my work, at least 95% of any invoice is time. 

One final point.......someone said to me that issues of 'composite supply' and 'multiple supply' may apply here. 

Apparently, composite supply is made up of a principal supply and an auxiliary supply, where the auxiliary supply would not realistically be sold on their own. (In my case, for example, the DVDs of the images would not be sold separately from the time/service that created them.) The rate of VAT applicable is the rate applicable to the principal supply.

Now, if it could be established that VAT on the principal supply, *commissioned photographic services*, was *clearly* 13.5%, regardless of the form of delivery of the images, then I wouldn't have a problem, since my time vastly outweighs my costs, as I wrote above.

I'm no tax expert (obviously!!) but to my reading this Revenue guideline is vague and ambiguous, to put it mildly.

D.

Ps. I forgot to mention the issue of 'multiple supply'. A multiple supply is where each individual constituent is physically and economically dissociable from the other. e.g. a newspaper with a free DVD. Where the cost to the supplier does not exceed €1, the supplier can disregard the relevant individual supply for the purpose of applying the relevant VAT rate. My understanding of this is that: a. Since DVDs cost only cents, I could charge 13.5% on the balance (i.e. my time) or b. If I gave the client the DVD for free, I could also charge 13.5% on my time. But, only if it was clear that VAT on the *service* or *time* that a photographer provides was 13.5% and, to my reading of the document, it isn't clear what it is because they seem to be obsessed with how you deliver the product rather than what you do for the client.

Pps. Just found this link............

http://www.revenue.ie/en/tax/vat/leaflets/mixed-supplies-goods-services.html

Under 'General 2.' is written........

"However, in relation to certain categories of supplies referred to as * composite supplies*, the new legislation provides that VAT will be chargeable at the rate applicable to the principal element in the supply."

Photography as a service has always been rated 13.5% (in the film era, even though I paid 21.5% on the purchase of materials, I charged 13.5% on the entire bill) and I've read nothing to the contrary. So, based on the above, I assume that I can continue to rate the entire at 13.5% since the materials (a couple of 50 cents blank DVDs in my case) are a fraction of the overall cost.

At the same time, someone who is not charging time plus materials (e.g. a digital scanning lab) but per item (digital files, in their case), should charge 21.5%.


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