We are not yet in a position where we can inform you of which Access services, if any, may incur VAT from April 2012 but we would like to share our current view with you.

As you may be aware, HMRC guidelines show that generally Royal Mail postal services that are part of the Universal Service Obligation (USO) or price regulated are exempt from VAT. A recent Ofcom consultation on proposals for the future regulatory framework for Access services suggests a proposal to remove the price regulation on Access Packets (including A3 Packets) and Access Premium. Should Ofcom decide to do this, our current view is that it is likely that these services will become subject to HMRC's current rulings on 20% VAT with effect from April 2012.

However, until Ofcom publishes its decision on the future of the regulatory framework for Access, Royal Mail is not in a position to inform its customers which Access services, if any, will be subject to VAT and the date on which VAT becomes effective.

 

For professional advice on VAT, talk to your Finance department, Accountant or Tax Advisor.