Horrible tax on magazine 'free' gifts

You spot the prices, we ask the questions: PriceWatch reader Angela King was prompted to get in touch after being astounded by the level of tax she was forced to pay on a magazine she bought for a friend's child. The magazine is called Horrible Science and has a cover price of €3.50. However when she went to the cash register she was asked for €4.24.

"I referred to the cover price and was told that there was some new tax on magazines where there was an item free with the magazine. In Horrible Science there is usually some kind of small science-type piece of equipment to carry out experiments in the magazine."

She says it appears that she is "being charged an extra 74 cent for a very small item". And she is. When PriceWatch bought the magazine this week we were also asked for the additional 74 cent above the cover price. On this occasion there were two free gifts included - a magazine storage box and a bloody leech which is sure to appeal to young boys (the blood, while very real looking, was presumably fake).

When we asked why the price at the till was at odds with the stated price on the magazine, we were told that publications such as Horrible Science are known in the trade as "part works" magazines and incur VAT at a rate of 21 per cent compared with 13.5 per cent for other magazines.

Given that most of these so-called part works magazines are aimed at children and many of them, including Horrible Science, are educational, hitting them with a 21 per cent tax seems like an unusual move. We contacted the Revenue Commissioners to find out more about this levy. It is not a new tax, and the legislation which covers it hasn't been changed since the 1970s, a spokesman said.

Apparently magazines such as Horrible Science which routinely contain additional items fall victim to what is known as the "package rule". "In a situation where a magazine is sold containing a toy, for example, then the rate of VAT imposed is 21 per cent because that is the VAT rate which applies to all toys," the spokesman explained.

What's more . . .

JUST THE TICKET Another reader has been in touch to complain about the new bus fares in Dublin city. Paul Kelly says that while he doesn't mind the lowest adult fare rising from €0.90 to €0.95, he resents the fact that bus drivers are now more likely not to bother giving him a 5 cent refund if he gives them a euro. "Three times this week I got on the bus and only had a euro with which to pay the fare. On all three occasions when I put the money in the slot I was given my ticket but no refund ticket. I know it is only 5 cent and I feel really cheap asking for it, but I resent Dublin Bus just taking it from me," he writes.