During 2011 there were a number of changes to the way in which the Royal Mail are regulated. A small number of services are now subject to VAT and this is due to be extended during 2012 across the piece. By 2nd April just about every Royal Mail service used by businesses will be VAT rated.
Although the change will not affect most businesses who are VAT rated, the change will have a major impact on small businesses, insurance brokers and financial institutions who are not able or are only partially registered for VAT.
Mailing Expert understands that services such as 1st and 2nd Class stamped and franked mail, Special Delivery, Next Day (Stamped and Franked), Standard parcels and Keepsafe will continue to be VAT exempt for the foreseeable future.
Some services such as Recorded Signed For will remain exempt from VAT only if purchased with an exempt service.
Financial institutions that are not VAT rated and have financial statements and the like to send out at the end of March will face a twenty percent hike in their costs unless they are able to get produce and send these out before the 2nd April when the changes take place.
After 2nd April Royal Mail pricing structures will be on a level playing field with downstream access providers who currently are not able to compete with the Royal Mail on price for non VAT businesses. It is likely that many businesses will move away from Royal Mail to use these cheaper services.
Mailing Expert is helping a number of businesses that want to beat the VATman by booking in mailings for February and March. We can also help those unrated businesses access the postage discounts available from the alternative providers. Call Mailing Expert on 01825 983 033 for further details.
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