In HMRC v Thorsteinn Gardarsson [2020] UKUT 0099, an appeal as to whether a day planner was a book or stationery has been remitted back to the First Tier Tribunal (FTT) to be remade. The FTT applied the wrong tests.

Books and printed matter and certain e-books that are designed to be read or looked at are zero-rated for VAT. Stationery is designed to be written on and is standard-rated.

Thorsteinn Gardarsson, an Icelander, sells ‘The Action Day Planner' to UK customers via Amazon.

HMRC decided that the Planner was stationery and standard-rated. HMRC backdated VAT registration to assess VAT of £170k, with Penalties for late notification of £35k.

In his appeal to the FTT, Mr Gardarsson relied almost entirely on VAT Notice 701/10 rather than actual VAT or case law. HMRC’s practice is to treat supplies of crossword books or exam study guides as zero-rated. Mr Gardarsson argued that like a study guide, his Planner taught time management.

HMRC appealed to the Upper Tribunal (UT) who noted that:

  • HMRC’s practice does not have the force of law. Mr Gardarsson's submissions led the FTT into error.
  • The FTT had failed to follow the reasoning in the High Court decision of Customs and Excise Commissioners v Colour Offset Ltd [1995] STC 85. It considers that the clear effect of that judgment is that, in such a case, the question should be whether the main function of the item is to be 'read or looked at'.

The case is remitted back to the FTT to decide that point.


Perhaps the VAT notice can be better written, although given the amount of tax at stake it is surprising that the taxpayer did not seek legal representation in the UK. 

Links to our guides

Books and printed matter
Changes to the VAT on e-books.

Penalties (VAT)
When do penalties apply for VAT? What penalties are charged and how can they be mitigated?

How to appeal a decsion of HMRC
What type of decision can you appeal? What are your different options when you disagree with HMRC? What are the key steps in making an appeal?

External links

HMRC v Thorsteinn Gardarsson v HMRC [2020] UKUT 0099 

VAT notice 701/10 on books and printed matter