Taxing Times for Direct Mail
Following the introduction in August of VAT on Presstream and
Mailsort 3 items weighing over 1 kg, HMRC have further extended their
influence within the postal market. Two more Royal Mail services will be subject
to VAT from 6th December 2011. Mailsort 1 and Mailsort 2 items weighing more than 1kg are to be removed from Royal Mail's Universal Service Obligation and therefore price control by Postcomm. Unfortunately this means they also become liable for VAT.
The complete lists of services now affected are shown below:
Express and Packet services
  • Special Delivery™ 9.00a.m. Stamp, Franking and Account
  • Special Delivery™ Next Day Account
  • Royal Mail Tracked® and Tracked™ Next Day
  • Royal Mail Sameday®
  • Packetpost packets weighing over 1kg
Marketing Services
  • Big Book
  • Royal Mail Heavyweight
  • Mailmedia®
  • Door to Door
Business Mail and Publishing
  • Mailsort 1 1400 packets weighing over 1kg
  • Mailsort 2 1400 packets weighing over 1kg
  • Mailsort 3 1400 packets weighing over 1kg
  • Presstream packets weighing over 1kg
International Services (VAT will only be added to EU destinations)
  • International Contract Services
  • International Airsure®
  • International Admail and Admail Packets
  • International Redirections
Inbound Mail Services
  • Keepsafe
  • Timed Delivery
  • Early Extraction™
  • Selectapost™
  • Local Collect
Other Services
  • Business Mail Secure
  • Admail
  • Callers Services
  • Rural Deliveries
  • Rural Carriage of Goods
Contract Services
  • Pre-Sorted Delivery
  • Mailroom Management
  • Mailroom Consulting Services
  • Royal Mail Relay®
These are some of the services that remain exempt from VAT UK Services:
  • First and Second Class (Stamped, Franked and PPI)
  • Special Delivery™ Next Day (Stamped and Franked)
  • Standard parcels
  • Recorded Signed For™
  • Cleanmail®, Cleanmail® Plus and Cleanmail® Advance
  • Mailsort® under 1kg (70, 120, and 1400)
  • Walksort®
  • Presstream® under 1kg
  • Sustainable® Mail
International Services
  • International Airmail
  • International Surface Mail
  • All HM Forces Mail (BFPO)