VAT on postage?

[The Londoner]

Quick VAT question if anyone knows the answer. I have just sent out a large mailshot using a mailing house. The invoice arrived today and they have itemised the cost of doing the work and the postage separately, but have then added VAT on to the total figure. Is the cost of Postage VATable like this?

[Eric Mc]

If you post using Royal Mail there is no VAT. Royal Mail as an entity are exempted from VAT (an issue that would have to be addressed if they were ever privatised).

If you use a courier service or a postal agency, they are obliged to charge VAT on the services they provide.

[The Londoner]

Cheers Eric

[Broccers]

We charge out postage seperately on mailings for this very reason. Get a credit

[Leftie]

The Londoner said:

Quick VAT question if anyone knows the answer. I have just sent out a large mailshot using a mailing house. The invoice arrived today and they have itemised the cost of doing the work and the postage separately, but have then added VAT on to the total figure. Is the cost of Postage VATable like this?

Are you saying that they have charged for postage, added the other costs then added VAT to it all? I thought that this was right when you were recharging that you aded VAT?

So, say I send goods worth £200 by Royal Mail Special Delivery that costs £18.50p. I don't reclaim any VAT on the postage because it isn't VATable, but then I do add VAT to the entire £218.50 when I invoice them. Is that right?

[Eric Mc]

By and large ,yes.

There is scope to not charge VAT on the postage element of your bill - although you have to show it separately from the main body of your fee and you must make it clear that it is a pure "Recharge" (i.e there is no profit element).

You often see this type of entry on solicitor's invoices when they are recharging non-VATable costs such as Stamp Duty or Land Registry search fees.