Post to Lose VAT Free Status ?

The row about the (ex-?) Royal Mail sell-off at an under-value rumbles on. But another problem is a possible challenge to the now privatised Royal Mail and its VAT exempt status. European VAT law says a public postal service must be exempt (2006 VAT Directive article 132). In the UK that becomes VAT Act 1994 schedule 9 group 3 and the exempt supply of public postal service by a universal provider. The problem is with Royal Mail being now just another private business, it might be challenged if its service stops being universal. Maybe a case of the law of unintended consequences tax fans ?

Eamon McNicholas
Tax Barrister, Accountant

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About Eamon McNicholas

Tax Barrister, Accountant www.EamonMcNicholas.com
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