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VAT will be chargeable on these services w.e.f. 31st January 2011
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Mostly recoverable by business, but increased costs for charities, NPMBs, unregistered and partially exempt entities
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Possibility that charges could have included a deemed VAT element that is now recoverable, retrospective four years...
The budget formalised a change announced a couple of months ago re certain Royal Mail Services – until now, these particular services had been treated as exempt, but from 31 January 2011 will become standard-rated. Generally these include services which are individually negotiated or not subject to any price/regulatory control, such as:
Aside from the obvious impact on costs going forwards, there is a growing body of opinion that as these services are considered by the ECJ to always have been standard-rated, charges incurred to-date must include an element of VAT that could be recoverable, going back four years. We are therefore looking to identify/brief clients with a view to constructing and submitting claims.
The link to the Royal Mail page is:
At this stage, we would suggest that you review the nature of any agreement/contract you have (or have had within the last 4 years) with the Royal Mail and establish if it falls within those where VAT has not previously been charged but would appear that it will be so going forwards. If you find that this does indeed apply, please do not hesitate to contact our Director of VAT Services,
Simon Anslow, and we can discuss how it may be possible to submit and manage a claim on your behalf.
