Stamps could cost £1 if newly privatised RM loses VAT

[TrueBlueTerrier]

Stamps could cost £1 if newly privatised Royal Mail loses VAT-free status in court next month

http://www.mirror.co.uk/news/uk-news/st ... ly-2366344" onclick="window.open(this.href);return false;?

Campaigners fear the unpopular sell-off leaves it vulnerable to losing its status in a High Court battle with TNT Post



First-class stamps could soar to £1 if newly privatised Royal Mail loses a vital court case, the Sunday People reports.

Campaigners fear the unpopular sell-off leaves it vulnerable to losing its VAT-free status next month in a High Court battle with TNT Post.

If its rival wins, Royal Mail could immediately be forced to add 20 per cent to its stamps.

This would send a first-class stamp from 60p to 72p, and a second class stamp from 50p to 60p. Experts also predict a 30 per cent rise on top – driving prices up to the £1 mark.

Martyn Forsyth – a campaigner who argued against the Royal Mail sale – said: “Such a price increase would hit vulnerable people hard, particularly the elderly and those in rural communities.

“A recent survey showed half the elderly people who use Royal Mail would have to reconsider sending Christmas cards. That’s tragic.”

He added: “A £1 letter is also going to be tough for small businesses. They’ve already been hit with parcels going up 50 per cent.”

Ned Corbett-Winder, who runs online surprise gift company notanotherbill.com says the sell-off could end up costing small businesses like his thousands a year.

He said: “Like many companies, I rely on the Royal Mail for my business. Considering there’s been much talk about supporting entrepreneurs and small firms, this could be a slap in the face.

“It costs my company an average of £2.25 to send a package. If that went up 20 per cent it would cost £500 a month.

“The Government should think about enforcing a price cap on first and second-class stamps, otherwise we’re likely to see a succession of price hikes.”

Dutch postal giant TNT took Royal Mail to the European Court in 2009 claiming its VAT exemption on stamps was unfair.

But Royal Mail stayed exempt as it was a “public service” for all.

However, TNT takes up the fight again in the High Court on November 26. It is expected to argue Royal Mail should now be subject to the same rules as others.

The sell-off has been bitterly criticised with fears of job losses and a down-graded service.

Last year Royal Mail boss Moya Greene received nearly £1.5million in pay and perks, around 72 times the pay of a postal worker.

[RedBagMan]

Last year Royal Mail boss Moya Greene received nearly £1.5million in pay and perks, around 72 times the pay of a postal worker.

... or 115 times (pro-rata)

[interesting]

Who will set the prices should they go up

[TrueBlueTerrier]

Who will set the prices should they go up

The government for some prices, those that are subject to price control, not sure which though. The rest the business.

[meweavy]

I think this was a given anyway.

[Lounge Lizard]

First class stamps ;
January 1974 3½p , 1984 16p , 1994 25p , 2004 28p , 2014 100p?

[hazzeem025]

I thought if you provided the uso you were exempt from the vat? sure I read somewhere it's part of eu laws?

[barbario]

Either way,Vince Cable is very relaxed about it.

[Brain Fury]

This is a lot more complicated than the Mirror is making out. TNT won the right to a judicial review of previous judgements that have gone against them in 2012 long before privatisation was even announced.. The privatisation of RM doesn't change the issue of VAT exemption which as the OP says TNT have been challenging since at least 2009. If RM was forced to charge VAT on more of it's service it would increase costs. However, it would probably also mean that RM could claim back the VAT it pays for bought in goods and services e.g vans which would reduce costs. At the moment we can only claim a partial VAT refund. Also it's all very well for TNT to argue about unfairness but they are not currently required to offer the same level of service that RM is. Fairnesss works both ways.

[janitor]

So if RM lost could they throw their toys out of the pram and tell TNT to deliver their own crap.

[k979aaa]

This is a lot more complicated than the Mirror is making out. TNT won the right to a judicial review of previous judgements that have gone against them in 2012 long before privatisation was even announced.. The privatisation of RM doesn't change the issue of VAT exemption which as the OP says TNT have been challenging since at least 2009. If RM was forced to charge VAT on more of it's service it would increase costs. However, it would probably also mean that RM could claim back the VAT it pays for bought in goods and services e.g vans which would reduce costs. At the moment we can only claim a partial VAT refund. Also it's all very well for TNT to argue about unfairness but they are not currently required to offer the same level of service that RM is. Fairnesss works both ways.

Their is no fairness in a FREE MARKET it is dog eat dog is it not.

[Brain Fury]

This is a lot more complicated than the Mirror is making out. TNT won the right to a judicial review of previous judgements that have gone against them in 2012 long before privatisation was even announced.. The privatisation of RM doesn't change the issue of VAT exemption which as the OP says TNT have been challenging since at least 2009. If RM was forced to charge VAT on more of it's service it would increase costs. However, it would probably also mean that RM could claim back the VAT it pays for bought in goods and services e.g vans which would reduce costs. At the moment we can only claim a partial VAT refund. Also it's all very well for TNT to argue about unfairness but they are not currently required to offer the same level of service that RM is. Fairnesss works both ways.

Their is no fairness in a FREE MARKET it is dog eat dog is it not.

Is ours a free market though. I don't think TNT or RM would say that it is.

[k979aaa]

This is a lot more complicated than the Mirror is making out. TNT won the right to a judicial review of previous judgements that have gone against them in 2012 long before privatisation was even announced.. The privatisation of RM doesn't change the issue of VAT exemption which as the OP says TNT have been challenging since at least 2009. If RM was forced to charge VAT on more of it's service it would increase costs. However, it would probably also mean that RM could claim back the VAT it pays for bought in goods and services e.g vans which would reduce costs. At the moment we can only claim a partial VAT refund. Also it's all very well for TNT to argue about unfairness but they are not currently required to offer the same level of service that RM is. Fairnesss works both ways.

Their is no fairness in a FREE MARKET it is dog eat dog is it not.

Is ours a free market though. I don't think TNT or RM would say that it is.

A rigged market maybe by that is what the Politian's did not the competitors!

[borders]

This is a lot more complicated than the Mirror is making out. TNT won the right to a judicial review of previous judgements that have gone against them in 2012 long before privatisation was even announced.. The privatisation of RM doesn't change the issue of VAT exemption which as the OP says TNT have been challenging since at least 2009. If RM was forced to charge VAT on more of it's service it would increase costs. However, it would probably also mean that RM could claim back the VAT it pays for bought in goods and services e.g vans which would reduce costs. At the moment we can only claim a partial VAT refund. Also it's all very well for TNT to argue about unfairness but they are not currently required to offer the same level of service that RM is. Fairnesss works both ways.

Their is no fairness in a FREE MARKET it is dog eat dog is it not.

Is ours a free market though. I don't think TNT or RM would say that it is.

must admit reading your comments severely hacks me off. the deed has been done and no matter how you and your kind dress it up, the very fact it was sold - with such a blatant disregard for public opinion - tells us everything we need to know about the country we have become. Our government doesn’t act in our interests, in the interests of the majority, but in the interests of powerful financial and business elites. It’s these elites who wanted the Royal Mail sold, not the British people.
By privatising the Royal Mail, our coalition government has shown that it does not care a jot for our national heritage, or the devastating impact the sell-off will have on remote rural communities, or how the elderly and the poor will be disproportionately affected. They have shown us that all they care about is rewarding their wealthy backers in the City of London and keeping in with the giants of global capitalism.

[Brain Fury]

This is a lot more complicated than the Mirror is making out. TNT won the right to a judicial review of previous judgements that have gone against them in 2012 long before privatisation was even announced.. The privatisation of RM doesn't change the issue of VAT exemption which as the OP says TNT have been challenging since at least 2009. If RM was forced to charge VAT on more of it's service it would increase costs. However, it would probably also mean that RM could claim back the VAT it pays for bought in goods and services e.g vans which would reduce costs. At the moment we can only claim a partial VAT refund. Also it's all very well for TNT to argue about unfairness but they are not currently required to offer the same level of service that RM is. Fairnesss works both ways.

Their is no fairness in a FREE MARKET it is dog eat dog is it not.

Is ours a free market though. I don't think TNT or RM would say that it is.

must admit reading your comments severely hacks me off. the deed has been done and no matter how you and your kind dress it up, the very fact it was sold - with such a blatant disregard for public opinion - tells us everything we need to know about the country we have become. Our government doesn’t act in our interests, in the interests of the majority, but in the interests of powerful financial and business elites. It’s these elites who wanted the Royal Mail sold, not the British people.
By privatising the Royal Mail, our coalition government has shown that it does not care a jot for our national heritage, or the devastating impact the sell-off will have on remote rural communities, or how the elderly and the poor will be disproportionately affected. They have shown us that all they care about is rewarding their wealthy backers in the City of London and keeping in with the giants of global capitalism.

The VAT argument a is complex one and TNT began arguing that RM should have to charge VAT long before we were privatised. Businesses that charge VAT can recover the VAT that they pay on bought in goods and services so if at some point in the future we were forced to charge VAT we could also recover the VAT we pay which we cannot do now. It could offset the effect on our prices of including VAT. I also suggested that TNT would argue that it isn't currently a free market because RM doesn't have to charge VAT on all services. Similarly RM would argue that it isn't a free market because TNT doesn't have to meet the USO standards for their direct delivery service.

I'd be fascinated to know what, in those comments, hacks you off or what you think I am trying to "dress up".

The Mirror might have reflected the issue more accurately if wasn't in such a hurry to "prove" that privatisation was a bad thing by promoting a scare story about the price of stamps.