Value Added Tax

Exemption ― postage and delivery charges

Produced by Tolley
  • 22 Dec 2021 18:45

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...

Exemption ― postage and delivery charges

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

Only ‘public postal services’ provided by a ‘universal service provider’ can be exempt from VAT.

Therefore in the UK, only postal services provided by Royal Mail Group Limited (as the operator providing the public postal service in the UK) that are subject to price and regulatory control can be exempt from VAT.

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 customers but may have been individually negotiated in respect to the price and other matters. Note 5 (b) enables these supplies to remain exempt from VAT, as they are not considered to be ‘individually negotiated’.

Minor contractual changes which can be viewed as immaterial and do not affect the essential terms of the standard contract will not be viewed as having been individually negotiated.

The supply goods that are incidental to a supply of exempt postal services are also exempt.

The following services are exempt from VAT when provided by the Royal Mail, unless individually negotiated, or not subject to any price and regulatory control:

  1. all services covered by the Universal

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