Postage and delivery charges

By Tolley
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The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Postage and delivery charges
  • Postal services
  • Delivered goods
  • Other aspects

This guidance note provides an overview of the VAT treatment of postage and delivery charges.

Postal services

Only postal services provided by the Royal Mail can be exempted from VAT and other providers are required to charge VAT on similar types of postal services provided. This was challenged by TNT Post UK Ltd and the CJEU ruled that the notion of “public postal services” cover operators who undertake to provide all or partof the universal postal service as defined in Article 3 of Directive 97/67/EC and that the exemption only applies to postal services provided in capacity as the universal service provider. It is excluded from the exemption in Article 13A(1)(a) of Sixth Directive specific services dissociable from the service of public interest, that is, services which meet special needs of economic operators such as services for which the terms have been individually negotiated.

The Queen on the application of TNT Post UK Ltd v The Commissioners of Her Majesty's Revenue & Customs and Royal Mail Group Ltd (C-357/07); Directive 2006/112/EC  art 132(a); VPOST3400; Directive 97/67, Artt 5 as amended by Directive 2002/39/EC; HMRC Notice 700/24 

EU law provides a mandatory exemption from VAT for supplies of postal services made by the public postal services. In the UK, the application of this provision is limited to Royal Mail and covers all of Royal Mail's postal services. Royal Mail, as the operator providing the public postal service, is the only postal body in the UK eligible to exempt postal services from VAT. However, it has also ruled that exemption applies to the public postal services acting as such and does not apply to supplies made by Royal Mail for which the terms have been individually negotiated.

However as a result of this decision it has become necessary for HMRC to amend the VAT treatment of certain services provided by

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