Royal Mail VAT exemption challenged:TNT

[POSTMAN]

http://www.expressandstar.com/business/ ... hallenged/" onclick="window.open(this.href);return false;

A rival company has won permission to challenge the Royal Mail Group's exemption under UK law from value added tax (VAT) in supplying "final mile" post delivery services.

TNT Post UK Ltd, a subsidiary of a Netherlands-based company, argues the exemption is inconsistent with EU law.

The exemption relates to access by other postal companies to Royal Mail's network for the final stage of delivery, covering the last mile or so from a Royal Mail depot to the ultimate recipient.

There are currently some 35 companies in the access market who collect, sort and transport letters and parcels in the UK but rely on the Royal Mail for the final mile delivery.

Mr Justice Kenneth Parker, sitting at London's High Court, ruled the TNT claim raised "a point of principle and of great practical importance" over the proper scope of EU VAT exemption.

The judge said it might be "desirable" to refer the case to the European Court of Justice (ECJ) and a hearing to decide the way forward should be held in January.

The ECJ confirmed in April 2009 that Royal Mail, as the only UK universal service provider, is the only body eligible to apply for VAT exemption. But it also decided that not all postal services Royal Mail supplied qualified for exemption.

Mr Justice Parker said: "It seems to me at least arguable that extending the VAT exemption to access services may have an undesirable effect on competition in the supply of postal services. It has, arguably at least, the potential to discourage operators such as TNT from seeking to establish their own final mile delivery services, not with a view to competing as a universal service provider, but as a means of attracting the custom of large-scale users of postal services, especially financial institutions."

A TNT spokesperson said later: "We welcome the decision this morning in our long-running campaign for the equalisation of VAT in the postal sector in the UK. We are now reviewing our options to take the case forward."

An HMRC spokesman said: "HMRC is satisfied that the mandatory exemption for postal services has been correctly implemented in the UK, in line with an earlier ECJ case involving TNT. As the High Court has now agreed a period of time for all parties to consider their position before a further hearing early next year, it would not be appropriate to make any further comment till then."

[fishtank]

A TNT spokesperson said later: "We welcome the decision this morning in our long-running campaign for the equalisation of VAT in the postal sector in the UK.

The sheer cheek of these w*****s leaves me speechless.
They talk about equalisation as if they get the bum deal.
They won't be happy until they've killed the golden goose.
A pox on all your f***ing houses you greedy scumbags.

[Phantom]

2 things could happen here,

1. rm loses vat and has to put prices up and scrap's the uso which i know it wants to get rid of cos of privatisation looming.

2. tnt and all the private operators set up a delivery network to by-pass rm altogether

All too late in my opinion and i think option 2 will surface, no uso and very high price rises

[steven100]

2 things could happen here,

1. rm loses vat and has to put prices up and scrap's the uso which i know it wants to get rid of cos of privatisation looming.

2. tnt and all the private operators set up a delivery network to by-pass rm altogether

All too late in my opinion and i think option 2 will surface, no uso and very high price rises

And lots people made unemployed.

[TrueBlueTerrier]

TNT could be cutting their nose to spite their face. At present as I understand it RM get VAT exemption on USO products and services, if the VAT exemption is withdrawn then it makes a stronger case for OFFCOM to set up a USO fund which all postal companies have to pay into to help Royal Mail (or any other USO provider) to continue to fulfil its obligations under law without cost.

If it doesn't upset TNT, it certainly will upset the small mom and pop operators that will have to factor in the extra cost.

[wabbithunta]

The thin end of the wedge!

Talk of unfair practice.. wtf! We do the last mile for them, saves them the work and infrastructure to carry out a proper delivery and they cherrypick as well and leave us the rest while they rake it in.. now they want more!
All take and no give from them.