V.A.T. rates on photography

Hope someone can clear this up.

Here's the link to Revenue, VAT and photography........

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

I break my invoice into a fee for my time, a fee for digital processing/editing and a fee (much smaller) for delivering the files either by DVD or mini USB hard drive.

Thusfar, I've been charging the combined time and processing fees at 13.5%, and the file delivery fee at 23%.

Make sense?

Thanks.

D.

Google composite supplies and multiple supplies.

This is a composite supply chargeable at the main supply rate i.e. photography.

Paddy199 said:

Google composite supplies and multiple supplies.

This is a composite supply chargeable at the main supply rate i.e. photography.

Click to expand...

So, are you saying I should charge everything at 23% or 13.5%?

Thanks.

D.

Dinarius said:

So, are you saying I should charge everything at 23% or 13.5%?

Thanks.

D.

Click to expand...

The whole supply is liable at the rate applicable to the principal element of the supply, which in this case is photography / processing of photos. The provision of the files is ancillary to this and not economically capable of being separated from it.

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

• a multiple supply is defined as being two or more supplies made in conjunction with each other to a customer for a total consideration covering all those where each of those supplies are physically and economically dissociable from each other. In this arrangement each of the supplies made in conjunction with others is treated as an individual supply and is taxable/exempt in its own right;
• a composite supply has one principal element referred to as a principal supply with the other elements of that supply being described as ancillary supplies. These always accompany the principal supply and the main feature of an ancillary supply is that it would not make sense from an economic or practical point of view to supply it other than in the context of that principal supply.

Thanks for the reply.

The reason I'm querying it is that all my big clients are state and state funded bodies who are not registered for VAT. Therefore, the cost implications of charging them 23% are obvious.

I charge a fee (1/4 day, 1/2 day or full day) and this is far and away the largest amount on the invoice. In that time I might take one photograph or 50. The digital editing of these photographs is charged by the hour.

If I could argue that my professional fee should be liable to 13.5%, even though I am delivering digital files, that would be great.

Any chance?

Thanks.

D.

If inspected, Revenue will have a problem with it and then you will have a problem!

Paddy199 said:

If inspected, Revenue will have a problem with it and then you will have a problem!

Click to expand...

But if it's a composite supply, and the main supply is photography services at 13.5% won't he be alright?

Ignore my last email.

It's 13.5% on photography so he has no problem with this composite supply and charging VAT at 13.5% on it.

Thanks guys.

I guess the two accountants I've had over the last 15 years, both of whom never raised this issue, probably didn't have a problem with it either.

Will keep my state funded, unregistered clients happy.

Phew!

Thanks again.

D

I'm not sure I agree entirely with this interpretation.

Firstly you need to look at what is being supplied: I would argue it is photographic images. Secondly, how they are supplied will determine that VAT rate applicable. If in printed format, the reduced rate; if electronically the standard rate.

The assumption here has been that it is the act of taking the photographs that is taxable at the reduced rate. If you look at the legislation it is the supply of photographic prints and the digital editing etc that is taxable at the reduced rate. The implication being that the act of taking the photographs is ancillary to the supply of the finished goods, rather than the supply of photographs being ancillary to the taking of the photographs.

If the supply of the photographs is the principal supply then it is the rate applicable to that element of the supply that will determine the rate applicable to the whole supply.

Hadn't thought of it that way...
I think OP should probably pay for advice, or go to his tax office to get it straight from the horse's mouth.

I take smeharg's point. But, if the VAT on Photography is 13.5%, and if you accept it's a composite supply invoice, and if the largest amount is the photography (my fee) then I think there's an argument for 13.5%. No?

Would you agree the Revenue.ie info is unclear at best?

Thanks.

D.

Dinarius said:

I take smeharg's point. But, if the VAT on Photography is 13.5%, and if you accept it's a composite supply invoice, and if the largest amount is the photography (my fee) then I think there's an argument for 13.5%. No?

D.

Click to expand...

That's the point I'm making - you're not supplying photography, your supplying digital prints, the photography being ancillary to the supply of prints.

The VATCA provides for the reduced rate on supplies of photographic prints, not on the supply of photography. You could spend 5 minutes at an event and take 5 photographs or you could spend an hour and take 5 photographs. The end result is the same: 5 photographs - I would argue that is the supply. The length of time you spend taking the photographs may influence the price charged but it won't change what is ultimately supplied, ie photographs.