VAT on Royal Mail Postage

VAT has always been charged on royal Mail services. As of January 2011 some services that can be accessed by a franking machine became liable for VAT. Putting it simply, if you don't have a SMART franking machine with a SMART Meter, you will no longer have the ability to access these services on your postal meter.

A SMART Meter with your Franking Machine enables the data to be filtered back to Royal Mail on the type of service used. This will automatically generate a VAT statement that will allow you to claim the VAT back through HMRC.

If you have a SMART machine, you will get a VAT invoice directly through Royal Mail.

What is a SMART Franking Machine?

SMART refers to a new breed of franking machines and the way that they account for VAT. If your postal meter can account for VAT then it is SMART.

OK, but how will this affect you?

Royal Mail VAT rule changes affect the status of many RM products. Some RM products have had VAT on them since 2011 but as of April 2013 this has been extended to a number of other products.

First and Second class stamps will continue to be VAT exempt but this is subject to future change.

You can get full information on Royal Mail Pricing from the royal mail website here

Most business customers can claim back VAT.

If you are registered for VAT and you sell goods or services that are subject to VAT then you should be able to claim back the VAT in the conventional way via your tax return.

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