Guest Post: VAT the Tat on children’s comics

By downthetubes Guests on August 13, 2013

Freelance cartoonist Alexander Matthews is published in Private Eye, The Phoenix, Prospect, The Week, The Dandy and RAC Magazine, among others. He’s also lectured in Graphic Design and illustration at Degree level and up until recently ran an Art and Design Foundation Course.

Fed up with falling sales for comics, he’s just started a campaign to improve the quality of children’s comics by making them more reliant on great content and less on cover-mounted freebies. Suggesting a change to the way in which free gifts are treated under VAT rules, he’s seeking support for the campaign – which he believes would benefit comic fans and cash-strapped parents alike…

When I go to a big newsagent or to my local supermarket I exhibit symptoms of a strange disease common to cartoonists, where we search for the magazines that feature our work even though we have no intention of buying them. As usual, I was greeted with a catastrophe. Can you spot The Beano in this display?

It is there, I assure you. Look for the screaming man.

See it now? This is the 75th anniversary issue of The Beano by the way, and this was actually a good day, but what’s to blame for this mess? It’s fairly obvious: bags stuffed with plastic toys and thin, flimsy magazines which lack the required tensile strength to prevent flopping about and tumbling onto lower shelves. (And the busy hands and devil-may-care attitude of kiddies).

Now, if you are not a regular peruser of kids comics like me, you’d probably think that comics for kids are in rude health, but the reality is as different as this shelf is to a helicopter gunship.

There are strictly only two comics in this display: The Beano, (incidentally, the cheapest publication here at £2.50, 50p higher than its regular price) and The Simpsons Comic (£2.99, which does not feature any new stories by British artists). Many of the others feature a page or even three of comics, but most are wall-to-wall features, puzzles, screen shots of TV animations and the like. All good stuff I’m sure, which people work hard on to produce, but how much enjoyment do children actually get from these things? Some of these mags are, literally, five minutes of entertainment and at £3.99 in some cases that represents enormously bad value.

There’s a reason these magazines do not feature many comics pages and that is that comics are more expensive to produce. These magazines are purely about profit making, but the profit making is based on attacking buyers by having the jazziest cover and the snazziest free gift. Is it any wonder that these magazines are bagged so that kids and parents cannot examine the contents?

Now, I am not being an idealist here. Companies should be attempting to make the biggest profit possible, but to do so they should be competing on content, not free gifts – and that’s why I think there needs to be a change, and wouldn’t you know, I think that I may have the answer.

The VAT rules state:

6.7 Promotional items in magazines

If you link a cover-mounted item such as a sachet of perfume or a CD to a magazine, you can treat it as zero-rated if the following conditions are met:

• you do not make a separate charge for it, and

• issues with cover mounted items are sold at the same price as those that do not, and

• the cost to you of the cover mounted item or items included in any individual issue does not exceed:
– 20% of the total cost to you of the combined supply (excluding VAT), and
– £1 (excluding VAT).

So the plastic toys attached to the magazine which are generally made in the far east, must cost less than £1 to avoid VAT (I suspect that they cost significantly less than that), and they also keep the cover price artificially high: issues without toys must be priced the same as those with. If VAT were charged, this would add a certain amount to the costs of the cover mounted toys. Whether magazines would raise cover prices or look to absorb the costs or simply stop cover mounting is a question I can’t answer. It would vary according to the business plans of individual magazines I’d imagine. A 20% charge on the plastic toys is not going to raise costs significantly however; we are talking a maximum of 20 pence, so perhaps we should think a little more deeply about what these magazines really are.

If you’ve ever seen children looking through the shelves, you will notice that they make immediate visual appraisal at the point of sale. They generally don’t stop to consider the content, and bagging means that often children can’t flick through the mag anyway. Here’s an anecdotal case that demonstrates just that:

My girlfriend’s seven-year-old niece came to visit us recently and I decided to test out some of my thoughts about these publications. A note of caution: she is quite a reader, so perhaps that skews this experiment somewhat. First of all I gave her The Beano, which she’d never read before and she sat down and read the whole thing, picking out some of her favourite bits. She asked for more comics, so I gave her the 32 page Nuke Noodle comic, free with Dennis and Gnasher magazine this month (plug, plug).

Nuke Noodle, the creation of Alexander mattews, originally for The Dandy.

Nuke Noodle, the creation of Alexander Matthews, originally for The Dandy.

She absorbed most of that, so I gave her Gary Northfield’s collection of Derek the Sheep and she liked that even better. All in all, she was occupied for quite a while.

Later we went to the newsagent where I let her pick out a magazine. After examining the covers, feeling the bags and checking the free gifts, she settled on a copy of Girl Talk for £3.99, with Moshi Monsters stickers and Love Heart Jewellery (which I spent the afternoon mending and re-mending as the plastic chains repeatedly broke!). The actual magazine is 34 pages of glossy celebrity-based features and fashion stuff. She’s had a look, and perhaps she’ll return to it, but I doubt it. Either the magazine is too old for her, or she’s just not that interested.

It’s my contention that these are no longer magazines with toys attached, but toys with a magazine attached. What other product do we buy not for the product itself but for something else? For the thing it comes with, not the thing itself? Perhaps a copy of a newspaper to get a cheaper bottle of water at WHSmiths, but that’s the only thing I can think of (and that’s a ploy to increase circulation figures). On top of that, if we saw the same sorts of toys in a Pound Shop, we’d probably turn our noses up at them, viewing (correctly) that they were cheap and nasty.

Yyet we spend £4 on them if they are bagged up nicely with a few glossy A4 pages? Madness. Damn you, pester power!

I believe the whole thing should have VAT charged on it: 20% on the whole £4. It’s a toy, or a bundle of toys and should be taxed as such. No toys, no VAT-journals and periodicals are zero rated.

Some calculations put together by a finance whizz:
$Vat on Tat Math$

Although these figures are based on a little guesswork, it can be clearly seen that to maintain profits, the cover price would have to be raised.

So what would happen if VAT was charged on this toy/magazine hybrid? Retail culture at point of sale is so ingrained that it’s impossible to say what a massive change like this would mean. The aim is for companies to junk the bag and the toys and force them to treat their products like magazines and comics once more. What I want is for content to be king.

I am considering starting a campaign to ask the Government to change these rules – and I really can’t see a downside for them. They have been actively looking for new things to stick VAT on, and to improve the situation for families (granted, this is a tiny thing, but if your two kids are demanding a 3 or 4 quid mag each during the weekly shop, you’d hope they’d be getting some quality merchandise for that price, wouldn’t you?).

Ignoring the fact that this is an obvious pipe-dream, I’d say it’s also a gamble, because publishers could simply crank up the cover price and preserve the status quo, but I think that these magazines are already at the limit of affordability.

What I’d like from readers of this blog post is their comments, suggestions, thoughts and corrections. I really believe this could work and ultimately we could end up seeing more proper comics for kids on the shelves. More comics is better for you because you probably love them like me, it’s better for the british comic industry as young comic readers graduate to older comics and it’s certainly better for me, because I write and draw them for a living.

• Alexander Matthews web site is at http://alexonemillion.com and his blog is at http://alexandercartoons.blogspot.co.uk: If you’d like to talk to him about this campaign you can email him at: alexandercartoonsATgmail.com, or follow him on Twitter: https://twitter.com/AlexanderMat. His original post, which he has let us cross post, is here – go over and comment there, too!

• Take the VAT on TAT campabign to twitter by using the hastag #vatontat