Spring 2007

Business Post subsidiary UK Mail says it has found a ground-breaking way to avoid charging VAT to some customers for postal services.

In the deregulated postal market, all carriers apart from Royal Mail have to charge VAT to customers, and this puts them at a particular disadvantage when serving banks and financial services clients. Such businesses are not VAT-registered, and cannot therefore reclaim the VAT from HM Customs & Revenue. It becomes an additional charge.

There is a work-around called Customer Direct Access, but it means the user having two contracts - one with the carrier, for collection and sortation, and one with Royal Mail, for final delivery. UK Mail says the access requirements and complexity mean this is only really viable for the largest customers.

Now UK Mail says it has struck as deal with Royal Mail under which it can act in the role of agent for a mailing client, paying the required the 'VAT-exempt access charge' to Royal Mail on the mailer's behalf.

This new system is called Agent for Access, and according to Business Post chief executive Guy Buswell: 'This marks a significant milestone for the non-VAT mailer market.