David Burgess, chair of the Schoolwear Association, explains when to charge VAT on schoolwear
If you print or embroider any item of clothing, regardless of size, where the embellishment is not part of the overall cost of the garment (that is, you are not buying or selling the plain garment), this is viewed as a service and you must charge VAT. If the enhancement is part of the whole cost you are charging for the garment, then there must be one overall cost for the finished item and the embellishment cost must not separated. As one overall cost, the VAT element will be determined by the sizing rules.
Primary and middle schools which cater only for under 14s can be zero rated on any size of garment as they are specific to that school and therefore will only be worn by under 14s. This does not cover staff uniform.
VAT on items for secondary schools is governed by the size guide-lines covered in VAT Notice 714. However, the cost of the print or embroidery must still be part of the whole cost of the garment. If it is charged separately, it has to be treated as a service and is VATable at the standard rate. Plain garments are subject to the specific size guidelines in VAT Notice 714.
The above is a summary of the VAT guidelines for garment decorators. For the full article from the Schoolwear Association, with examples of sizing for different types of garments, go to the Images website (www.images-magazine.com): you will also find a link to VAT Notice 714, which gives a detailed explanation of the various issues relating to the zero rating of children’s clothing. It is recommended that all those working in this sector read VAT Notice 714 in full.