Businesses lodge VAT claims for using Parcelforce

Mail-order businesses, internet retailers and other users, including Royal Mail’s Parcelforce subsidiary, are potentially eligible to backdate VAT reclaims going back four years following an HM Revenue and Customs (HMRC) ruling, reports The Daily Telegraph. The article continues:

Royal Mail is being forced to introduce VAT on a number of its services after losing a European Court of Justice battle with TNT, the private- sector distributor. TNT argued it was at a competitive disadvantage with Royal Mail because it was subject to VAT in the business post market.

The Court held that Royal Mail should have been charging VAT all along and it is this ruling that has opened up the possibility of backdated claims, said accountants Smith & Williamson.

Hannah Dobson, the firm’s VAT director, said: “I believe there could be thousands of businesses up and down the country, both large and small, which could benefit.

“A number of organisations have already lodged VAT reclaims on the back of this case. Despite initially stating otherwise, HMRC has now confirmed it will consider such claims.”

Royal Mail has yet to announce where VAT will fall but Parcelforce and business post could be the first in line.