Charities can bypass VAT on mail by using private providers,

[TrueBlueTerrier]

Charities can bypass VAT on mail by using private providers, says tax adviser

http://www.thirdsector.co.uk/news/11297 ... x-adviser/" onclick="window.open(this.href);return false;

Peter Jenkins of the Charity Tax Group says charities sending large amounts of mail can benefit most

Charities that regularly use bulk mail should be able to avoid VAT bills on most of the cost, according to a Charity Tax Group adviser.

Since 2 April, charities have had to pay the standard rate of VAT on bulk mail services from the Royal Mail – a move estimated to cost the sector £18m a year.

But Peter Jenkins, VAT adviser to the CTG, said he had received confirmation that charities could avoid most of this cost by using 'downstream' mailing services.

This involves paying a private company to sort mail and deliver it to a Royal Mail depot. The private provider will then pay the Royal Mail to take the post to the door.

The Royal Mail does not charge VAT if it provides only this 'final mile' delivery service, said Jenkins, even though it makes up almost all of the cost of bulk mail services. This is because this part of the journey - unlike the sorting and delivery - is not subject to competition.

Although the charity would have to pay VAT on sorting and delivery to the depot, he said, this service was very cheap compared to the 'final mile'.

"This mechanism won’t help every charity," he said. "For this to work, a charity must be able to do a deal with the bulk mail provider, and that means they must have reasonably large guaranteed volumes.

"But those that do have that volume can use this to avoid most of the added VAT cost."

[Lounge Lizard]

I'm not sure that the Charity Tax Group are right about this, but if DSA mailings are not subject to VAT but Royal Mail mailings are subject to VAT then that's not fair and the opposite of what it should be given our Universal Service Obligation.

[PhilthyPhil]

I thought the dsa companies had to charge vat and the reason we now have to is that they complained it was unfair that we were exempt.

[POSTMAN]

VAT bits here...
http://www.royalmail.com/customer-servi ... at-changes" onclick="window.open(this.href);return false;

[Lounge Lizard]

VAT bits here...
http://www.royalmail.com/customer-servi ... at-changes" onclick="window.open(this.href);return false;

Royal Mail products that are liable to VAT:
Packet Despatch
• 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.
Marketing Services
• Advertising Mail™ (formerly Advertising Mail 70,120, and 1400, including Big Book and Heavyweight options)
• Sustainable® Advertising Mail (formerly Sustainable Mail)
• Advertising Mail™ with Response (formerly mailmedia®)
• Door to Door™
Publishing
• Publishing Mail (formerly Pressstream®)
General Correspondence
• Business Mail 1st Class (formerly Standard Account letters and large letters, Automated Standard Tariff Large Letter (ASTLL), Cleanmail®, Cleanmail® Plus and Cleanmail® Advance, Mailsort® 70, 120, 700 and 1400, and Walksort®)
• Business Mail (formerly Standard Account letters and large letters, Automated Standard Tariff Large Letter (ASTLL), Cleanmail®, Cleanmail® Plus and Cleanmail® Advance, Mailsort® 70, 120, 700 and 1400, and Walksort®)
Response Services
• Response Services License fees
• Special Delivery™ with Response
• Business Reply Plus and Freepost Plus
• Business Reply Standard, Freepost Standard and Freepost NAME
International (VAT will only be added to EU destinations)
• International Contract Tracked and Secure Services (Contract Airsure® and Contract Signed For)
• International Contract Services (Mixed Mail, Letters, Flats, Packets, Destination Sort and Mbags)
• Airsure®
• International Admail and Admail Packets
• International Redirections
Outbound Mail
• Collections
Inbound Mail
• PO Box®
• Timed Delivery™
• Early Collect
• Early Extraction™
• Pre-sorted Delivery
• Selectapost
• Local Collect®
• Diversion
Other Products
• Business Mail Secure
• Admail
• Callers Services
• Posting Cheque administration charge
• Private Posting Box
• Royal Mail administration fee for collection of HMRC charges
• Royal Mail Pouch Services
• Rural Newspaper Delivery
• Rural Carriage of Goods
• Redirect Diversion
• Ministerial Pouch services
• Do not redirect
• Safebox
Contract Products
• Mailroom Management
• Mailroom Consulting Services
• Royal Mail Relay®