friendlybaby
24-03-2010, 05:53 PM
I just had an email from Parcel Force to say that as of 1st January next year it is likely that they will have to charge VAT at the standard rate on their delivery services in the UK and Europe, and zero-rated for Worldwide parcels. This doesn't matter for those of us that are VAT registered, but would mean an increase in costs for those that aren't. It also mentions that it is affecting different aspects of the Royal Mail in different ways. I'm not sure what this means, but it may mean that normal post is affected too. This is the email I received...
---------------------------
Today as part of the Budget the Government has announced its intention to make certain changes to VAT that will impact on the postal services provided by Parcelforce Worldwide.
What is the change? If the change announced today becomes law, Parcelforce Worldwide will generally cease to be covered by the postal services VAT exemption.
What are the new arrangements? These would essentially be same as those for our competitors. For parcels sent by UK customers from a UK address, the standard rate of VAT (currently 17.5%) would apply to items being sent inside the European Union (including the UK) and a rate of zero would apply to items being sent to the rest of the world.
When will the change happen? The change announced will only occur if it becomes law. The draft legislation includes a date, and this is also subject to consideration by Parliament. The Government has proposed the change will apply on and after 31st January 2011.
Will this mean higher prices? No. Our prices will not be increasing, but they may become liable to VAT, which would therefore be added to our prices for certain services. Customers that are VAT registered will ordinarily be able to recover any VAT added.
HMRC (http://www.hmrc.gov.uk/vat/start/register/index.htm) provides useful information on the implications of registering for VAT, including voluntary registration.
What if I am unable to fully recover VAT? If you are currently not VAT registered and/or cannot fully recover VAT, then please let us know (by completing the short form) and we will contact you separately for a more detailed discussion.
What about Royal Mail? The change announced by the Government impacts different parts of the Royal Mail Group in different ways. Royal Mail and Royal Mail Wholesale will be communicating with their customers separately.
---------------------------
Today as part of the Budget the Government has announced its intention to make certain changes to VAT that will impact on the postal services provided by Parcelforce Worldwide.
What is the change? If the change announced today becomes law, Parcelforce Worldwide will generally cease to be covered by the postal services VAT exemption.
What are the new arrangements? These would essentially be same as those for our competitors. For parcels sent by UK customers from a UK address, the standard rate of VAT (currently 17.5%) would apply to items being sent inside the European Union (including the UK) and a rate of zero would apply to items being sent to the rest of the world.
When will the change happen? The change announced will only occur if it becomes law. The draft legislation includes a date, and this is also subject to consideration by Parliament. The Government has proposed the change will apply on and after 31st January 2011.
Will this mean higher prices? No. Our prices will not be increasing, but they may become liable to VAT, which would therefore be added to our prices for certain services. Customers that are VAT registered will ordinarily be able to recover any VAT added.
HMRC (http://www.hmrc.gov.uk/vat/start/register/index.htm) provides useful information on the implications of registering for VAT, including voluntary registration.
What if I am unable to fully recover VAT? If you are currently not VAT registered and/or cannot fully recover VAT, then please let us know (by completing the short form) and we will contact you separately for a more detailed discussion.
What about Royal Mail? The change announced by the Government impacts different parts of the Royal Mail Group in different ways. Royal Mail and Royal Mail Wholesale will be communicating with their customers separately.