Truprint, the Newton Abbot-based photo finishing business, has triumphed in a three-year tax battle with HM Revenue & Customs over whether it should have been charged VAT on its photobook sales.
The company, which is owned by Harrier LLC, part of US-based District Photo, was charged £545,800 VAT on the products that were incorrectly processed as 'photo albums' rather than zero-rated books, according to reports.
Truprint has also legals fees of £500,000 to cover the period from 2006 to 2009. In addition, the company incorrectly paid tax on the items from 2009 to 2011.
According to London VAT tribunal Judge Roger Berner, the majority of Truprint’s photobooks should be classified as books due to the printed content they contain.
He said: "It is clear that a book (or booklet) must have content. Something that has the physical characteristics of a book, but no content, such as a memo book with blank pages, a diary with printing confined to the days of the week and ancillary information, or an address book with printed headings and ancillary material, is not a book (or booklet) in the ordinary sense of the word."
Berner added that a book can have content that is exclusively text, or exclusively material such as photographic images or diagrams or drawings, or any mixture of that content.
Speaking to the Daily Mail, Truprint finance director and company secretary Graham Clark said "common sense prevailed" with the ruling.
"This was hampering our business but now the jobs are safe and we will be able to offer our photobooks at lower prices," Clark added.