UK Parcelforce has big unfair advantage, says TNT boss

Parcelforce has an unfair advantage and should be privatised, the managing director of rival TNT Express Services has claimed.

Tom Bell attacked the Royal Mail’s parcel delivery business claiming its VAT exemption was unfair and discriminatory.

“It’s not just companies such as mine which are being discriminated against. The taxpayer is losing out because Parcelforce should be paying VAT and those taxes could be used for the greater good of the country,” Mr Bell said.

Atherstone-based TNT said the comments echoed sentiments from think-tank The Institute of Economic Affairs.

Last year, the IEA said there was no case for Parcelforce to remain in Government ownership and that it should be privatised, even if it led to it going out of business.

Mr Bell said: “Parcelforce is subsidised by the Government.

“They start out 17.5 per cent ahead of any other express delivery company because they don’t have to factor the costs of VAT into their pricing policy and that makes them more attractive to potential customers.

“TNT Express Services and others in the express sector are having to operate in a market where volumes are down, margins are thinner and the overall trading climate is tougher than it has been for many years.

“If Parcelforce was in private ownership they would have to charge customers VAT. They would have to make money to survive instead of being shielded from the realities of the marketplace.

“Competition is good for everybody – we welcome it. If you’re on the same field, operating within the same framework of rules and regulations then the best team wins and everybody respects them. That’s how it should be.”

A Parcelforce spokesman said the issue was a matter for the Government.

“There’s a flip side, Parcelforce Worldwide cannot reclaim and recover VAT on most of its bills for the goods and services it buys to run the company,” he said.