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Changes for the scope of VAT for postal services

For many years, postal products have been exempt from VAT.


A recent court case has led to a change in the rules about VAT on postal services throughout the European Union. By law, from 31st January 2011, Royal Mail has to start charging VAT at the Standard Rate of 20% for UK customers, and on some postal products within the European Union (EU), including within the UK.

 

What services are not subject to VAT?

 

Here are just some of the following services remain exempt from VAT, in addition to free services.


• 1st and 2nd Class (stamps, online, franking, account)
• Special Delivery Next Day (stamps and franking)
• Standard Parcels
• Recorded Signed For (if purchased with a VAT exempt service)
• Keepsafe (personal and business)

 

What services are subject to VAT?

 

• Special Delivery 9.00am (stamps, franking and account)
• Special Delivery Next Day (account)
• Royal Mail Tracked and Tracked Next Day
• Royal Mail Sameday
• Packets (including Standard Account packets, Packetpost, Packetsort and Packetsort Plus)
• Packetpost Returns
• Recorded Signed For will also become liable to VAT if purchased as an add-on to a standard rated service. In all other circumstances it will remain VAT exempt. 

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