Exemption ― postage and delivery charges

Produced by Tolley
Exemption ― postage and delivery charges

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

  • Exemption ― postage and delivery charges
  • Postal services
  • International services
  • Delivered goods
  • No separate delivery charge levied
  • Separate delivery charge
  • Delivery charge ― disbursement?
  • Other aspects
  • Packing charges
  • Retail schemes
    • More...

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marked the end of the Brexit transition / implementation period entered into following the UK’s withdrawal from the EU. At this point in time, key transitional arrangements came to an end and significant changes began to take effect across the UK’s VAT and customs regime. This document contains guidance on subjects potentially impacted by these changes. Before continuing your research, see the Brexit — overview guidance note.

This guidance note provides an overview of the VAT treatment of postage and delivery charges. For supplies of stamps see the Exemption ― supplies of stamps and philatelic items guidance note.

Postal services

Under EU law, only ‘public postal services’ provided by a ‘universal service provider’ can be exempt from VAT. This was challenged by TNT Post UK Ltd and the CJEU ruled that the concept of ‘public postal services’ covers operators who undertake to provide all or part of 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.

Royal Mail, as the operator providing the public postal service in the UK, is the only postal body in the UK eligible to exempt postal services from VAT. However, following the TNT decision, exemption does not apply to supplies made by Royal Mail for which the terms have been individually negotiated. Consequently, it was necessary for HMRC to amend the VAT treatment of certain services provided by Royal Mail and the current rules are outlined below.

Postal services supplied by Royal Mail that are individually and freely negotiated or not subject to any price and regulatory control will be liable to VAT.

It should be noted that Royal Mail has a number of products which, by regulation, have to be made available on the same terms and conditions to all custome

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