VAT increases on International tracked postage

Kite2010

I think this is the first step along the lines of all postage services other than a standard 2nd class service getting Vat added onto.

Or am I just too pessimistic?

RFW

soolin wrote: »

With apologies I know someone posted this a few weeks back but I can't find the thread.

That was probably me, my thread was specifically about Parcelforce which has a VAT charge across the board from tomorrow, so a 20% increase for those not VAT registered and a bigger chunk of cashflow taken up for those who are.

soolin

RFW wrote: »

That was probably me, my thread was specifically about Parcelforce which has a VAT charge across the board from tomorrow, so a 20% increase for those not VAT registered and a bigger chunk of cashflow taken up for those who are.

Thank you, I was sure I had read something but the search on MSE is very patchy for me and I can't find it to link to.

bare_foot_hippy

As far as I can tell from HMRC and the PO/Royal Mail websites, Standard Parcels are one of the protected (VAT exempt) services EU Law requires them to provide. As such, no VAT is charged on Standard Parcels postage prices.... until you add enhanced insurance to it, when the whole price attracts VAT. How is this allowed? Are there any tax law experts out there who can explain it to me? Royal Mail haven't replied to my message and the teller at the Post Office didn't have a clue about it.
Cheers.

custardy

bare_foot_hippy wrote: »

As far as I can tell from HMRC and the PO/Royal Mail websites, Standard Parcels are one of the protected (VAT exempt) services EU Law requires them to provide. As such, no VAT is charged on Standard Parcels postage prices.... until you add enhanced insurance to it, when the whole price attracts VAT. How is this allowed? Are there any tax law experts out there who can explain it to me? Royal Mail haven't replied to my message and the teller at the Post Office didn't have a clue about it.
Cheers.

it probably comes down to the competition.
once you add insurance its a different service and as such maybe relevant to a competitors services.
the only reason VAT was added was through pressure from the DSA companies.
the same reason RM has to get permission to offer free PO local collect at christmas. as its a service competitors cant offer.

martindow

bare_foot_hippy wrote: »

As far as I can tell from HMRC and the PO/Royal Mail websites, Standard Parcels are one of the protected (VAT exempt) services EU Law requires them to provide. As such, no VAT is charged on Standard Parcels postage prices.... until you add enhanced insurance to it, when the whole price attracts VAT. How is this allowed? Are there any tax law experts out there who can explain it to me? Royal Mail haven't replied to my message and the teller at the Post Office didn't have a clue about it.
Cheers.

Not a tax expert, but I understand it to be that basic services (1st, 2nd, standard parcels and ordinary special delivery) are exempt or zero rated. Extra services are liable to VAT. So SP with enhanced compensation, SD 9am and with extra compensation are all 20% more.

Don't blame RM - this has been forced on them after a court case brought by TNT.

http://www.hmrc.gov.uk/briefs/vat/brief6409.htm

RFW

martindow wrote: »

Not a tax expert, but I understand it to be that basic services (1st, 2nd, standard parcels and ordinary special delivery) are exempt or zero rated. Extra services are liable to VAT. So SP with enhanced compensation, SD 9am and with extra compensation are all 20% more.

Don't blame RM - this has been forced on them after a court case brought by TNT.

http://www.hmrc.gov.uk/briefs/vat/brief6409.htm

It is on services that are deemed to be 'business to business'. Given the economy and the additional revenue the government weren't going to put up a fight to not introduce the charges, I'm surprised how little publicity it has received.
Having spoken to a few people in the courier business in the last few days they seem unaware. I'm sure it will lose Parcelforce a fair amount of business.

F&L

martindow wrote: »

Not a tax expert, but I understand it to be that basic services (1st, 2nd, standard parcels and ordinary special delivery) are exempt or zero rated. Extra services are liable to VAT. So SP with enhanced compensation, SD 9am and with extra compensation are all 20% more.

I have a Royal Mail business account and if I use that for ordinary special delivery I have to pay VAT but not if I take the parcel to a post office. The email I had from the Royal Mail explained that all these changes were due to the court case mentioned.

terra_ferma

thank you TNT! :mad:

bare_foot_hippy

Thanks for the replies! Seems a bit rubbish to me, and yes I think it will lose them some business as I'm considering using couriers more often with the more valuable parcels - for only a few pennies more I can sit at home instead of lugging a packet to town and queuing for minimum of 15 minutes at the PO :S