Following a recent European Court of Justice case, there is an opportunity for businesses to recover VAT on their Royal Mail postal contracts.
Customers that may benefit are logistics firms, mail order companies or large retail home delivery firms who have individually negotiated contracts with Royal Mail.
The case involved TNT contesting the VAT exemption that is only given to Royal Mail on parcel and postage charges and not other commercial providers of similar services. Whilst TNT lost the main issue in case, the ECJ did rule that where the Royal Mail has a specific and separate contract with a customer to supply parcel and postage services, this is subject to VAT.
Stuart Crook of Wellers Accountants comments: “Whilst HMRC haven’t made any announcements yet, we are looking at submitting claims on a protective basis for businesses that have separate contracts with Royal Mail for parcels and postage. The VAT reclaim is based on treating the amounts paid the Royal Mail over the last three years as VAT inclusive.”
If you have a commercial contract with Royal Mail and want to contact Wellers Accountants for advice visit www.wellersaccountants.co.uk.
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