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VAT on postage and packing

I have a client who is selling via Ebay, has reached the VAT threshold and now registered . His despatches are done partly via parcels and part via normal royal mail. As he will be reclaiming VAT on the parcel despatch costs, he is aware that full VAT is payable on P and P charged. Where however goods are sent via normal mail using stamps he is unsure as to whether he will have to account for output VAT on the P and P portion of the sale.

Thanks in advance

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15th Feb 2012 10:10

VAT follows the taxable status of the supply, so if posting standard rated goods, then he must account for standard rated VAT on the postage and packaging even though there is no VAT on Royal Mail stamps.

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15th Feb 2012 14:52

P&P is entirely vatable

I agree - P&P qualifies as a service, so you pay VAT.

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16th Feb 2012 08:40

Thanks for the replies.

 

Some of the items he sells are zero and 5% rated. Would they be the applicable output VAT rates for P and P on those specific sales  ?

 

What will be the situation on mixed orders where some items are 20% and some 0% ?

 

Thanks again in advance.

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