VAT on Postage

[ferret]

I use two companies when ordering in my stock both of which I pay for postage one company applies postage at checkout then adds VAT the other subtotals the garments, adds VAT then the postage to give me my total.

My question is as postage is not VAT applicable should the first company be applying VAT to the postage? if no then this company owes me and many others a lot of money. £1.20p per order for me which is 35 orders since I have been using them.

[pisquee]

If the company is VAT registered then it needs to charge VAT on all of its services. No matter what the VAT status of the postage/delivery service they use is, as they are reselling it on to you, VAT needs to be added.

[ferret]

You can not add VAT to a not VAT applicable product or service, In catering there is no VAT on food except sweets when you resell you do add VAT because you have changed the original product ie, you have cooked a steak and applied a service to it so it then becomes VAT applicable but if you are just reselling a raw steak you do not add VAT.Both of the companies are VAT registered, one is charging correct and one is not.Can others who purchase whole sale get back to me with what is on their sales invoices?I will be asking this question of my accountant once be is back at work next week.

[WePrintForYou]

VAT is applicable to postage.

Our 24/48 items we mostly send all have vat on them.

Also our courier shipping have vat on them

[James990]

Although VAT is not applicable to most postage they get away with it being listed as Poatage and packaging, and therefore add the VAT. Yep a very cleaver scam!

[ferret]

Although VAT is not applicable to most postage they get away with it being listed as Poatage and packaging, and therefore add the VAT. Yep a very cleaver scam!

I would not say it was a scam as they have to pay that to the VAT man so their is no gain for them, I think it has just been calculated incorrectly.

[socialgiraffe]

I would not say it was a scam as they have to pay that to the VAT man so their is no gain for them, I think it has just been calculated incorrectly.

I agree, I can not see any benefit in adding VAT to Royal Mail postage. If they send it via a 24 hour courier such as TNT then VAT is added

[JMugs]

Domestic 24 / 48 hour parcel delivery through Royal Mail if they have an OBA is VAT'd....I have OBA and it shows on my invoices.


Janners

[bms]

You can not add VAT to a not VAT applicable product or service, In catering there is no VAT on food except sweets when you resell you do add VAT because you have changed the original product ie, you have cooked a steak and applied a service to it so it then becomes VAT applicable but if you are just reselling a raw steak you do not add VAT.Both of the companies are VAT registered, one is charging correct and one is not.Can others who purchase whole sale get back to me with what is on their sales invoices?I will be asking this question of my accountant once be is back at work next week.

If the supply of goods are 100% zero rated then vat is zero rated on the carriage/ postage
If the supply of goods are 100% standard read then vat at the standard rate is applied to carriage/ postage
If there is a mix of zero rated and standard rated then a supplier may charge vat on all postage as to work out the % weighting of zero rated/ standard rated and calc vat accordingly is a complicated calc and often the costs of so doing are more than the saving. All the vat goes straight to HMRC so the supplier doesn't benefit as all they do is collect vat on behalf of HMRC.

...of course this only applies to vat registered companies.

[pisquee]

If a company is collecting what it is calling VAT when it isn't and keeping it for themselves, then this would be a scam and fraud. But,in general terms companies charging VAT don't get to keep it.

You also assume that because when you go to the post office and pay for stamps for the Royal Mail services that you use which are VAT exempt, that the company/ies you are discussing here also use VAT exempt services. They may do, but for a VAT registered business to be doing so would seem foolish when RM have VAT applicable services aimed at businesses. As mentioned above RM24 is effectively the same as first class, but the VAT statuses are different.

When a company posts something, even if they are using standard VAT exempt postal services, they aren't just reselling you the Royal Mail delivery product, they are charging you for postage and packing, including the staff and admin costs associated with getting the product out the door to the RM depot, or prepped for RM collection,or for a member of staff to go to the post office and wait in the queue along with everyone else, they may choose to charge extra than the "stamp rate" to cover these associated costs, or even to make a profit, and onto all of that VAT is added as you are not just paying for the RM service.