Postal Charges – VAT refunds

Background

Following a legal challenge in the European Courts it was confirmed that the Royal Mail, when acting as a provider of ‘public’ postal services, was able exempt its services from VAT. However, the Court also ruled that this did not apply when separately negotiated terms were provided.

The Court’s ruling means that the UK has applied the exemption far too widely than is permitted by European law. This means that the UK must bring UK policy in line with the European Court Judgment.

A further legal challenge has been made at the European Court by TNT Post UK Limited because TNT felt that there was unfair competition. Once again the Court confirmed that when the Royal Mail acts as the operator providing the ‘public’ postal service it is the only postal body eligible to exempt its postal services from VAT. As a result some postal services supplied by Royal Mail – those which are individually negotiated or not subject to any price and regulatory control – and which have been treated as exempt will become liable to VAT at the standard rate with effect from 31 January 2011.

Who can make a claim?

Those businesses who can recover their VAT can make a claim.

How far back can a claim be made?

Taxpayers need to consider whether or not they should lodge a claim certainly for the previous 4 years but cases currently proceeding through the Courts suggest that legally claims for a much longer period should be considered.

Making a claim

We would be very happy to assist with these claims and normally can do so on a ‘no win no fee’ basis.

Elysian Associates
March 2012

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