Tag: Royal Mail

Royal Mail under attack by Europe

Posted by | Apr 11, 2006 | |

The European Commission began moves towards possible legal action against Britain yesterday, accusing it of giving Royal Mail unfair tax advantages over its rivals. Brussels is challenging a UK decision to exempt most of Royal Mail’s activities from VAT, although the tax has to be paid by companies offering the same services. Similar legal action is being brought against Germany. Announcing the move, Laszlo Kovacs, the Taxation Commissioner, insisted that any VAT exemption for postal services had to be properly applied to “minimise distortions of competition in a liberalised market between former monopolies and market entrants”. Under European legislation, former postal monopolies have not had to pay VAT if they provided general services of public interest, such as the delivery of letters for the same price anywhere in their country. In Britain, Royal Mail is regarded as a universal service provider and as being entitled to exemption from VAT.

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Mailing Houses: Tough lessons in deregulation

Posted by | Apr 10, 2006 | |

Postal liberalisation is revolutionising the UK’s mailing house market. It may put smaller firms out of business and encourage consolidation, but canny operators that rise to the challenge will survive and could even benefit from the competition, writes Alex Blyth.

The mailing house as we know it is becoming a thing of the past.

Postal deregulation, which came into force on 1 January, will change the shape and nature of the industry forever. It will put some mailing houses out of business, and many of the smaller ones will need to merge or align themselves with postal carriers in order to survive. Those who do survive will find their role significantly altered, as clients increasingly ask them for advice on which postal carrier to use. Quite simply, this is an issue that no-one in the mailing house sector can afford to ignore.

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VAT/Postal services – Commission launches infringement proceedings against Germany, the United Kingdom and Sweden

Posted by | Apr 10, 2006 | |

The European Commission has sent formal requests for information to the United Kingdom, Germany and Sweden on the VAT application of postal services. The United Kingdom and Germany exempt from VAT all or most postal services supplied by their former postal monopolies, while Sweden does not exempt postal services. Current VAT legislation is not yet adapted to the postal market that was liberalised by Directive 97/67/EC. The Commission, awaiting the revision of the current legislation according to its proposals , has to ensure a proper application of the VAT postal exemption in order to avoid distortions of competition between former monopolies and market entrants. The requests take the form of letters of formal notice, the first stage of the infringement procedure laid down in Article 226 of the EC Treaty. The Member States involved are invited to reply within two months.

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Price of UK first class stamps to rise

Posted by | Apr 3, 2006 | |

The price of a first class stamp will rise by two pence to 32p from today. The increase is part of the Royal Mail’s bid to work out future financing as it deals with competition since the postal market was opened up in January. But the firm has been reined in from costing its stamps too high by its regulator Postcomm, until 2010 when first class stamps will go up to 37p. The price rise will also see first Class franking prices go up to 31p, second class stamps up to 23p, and a second class franking price will be introduced at 22p. The Special Delivery service will increase by 25p to GBP4.10 for mail up to 100g.
The modest increase will enable the Royal Mail to modernise its operations, secure the nationwide delivery service and help to plug its GBP4 billion pension fund deficit.

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BBC cancels contract for UK post offices to sell TV licences

Posted by | Apr 1, 2006 | |

UK post office were dealt another blow yesterday when the BBC announced an end to their contract to issue television licences after 60 years. The corporation said it would save pounds 100 million over six years by giving the contract to Paypoint, which operates over-the-counter payments through shops such as Co-op, Londis, Spar, Costcutter, Texaco and Somerfield. But sub postmasters, who are in many cases already struggling to avoid closure, fear that the move will further damage their businesses. An estimated 2.1 per cent of post office income derives from the sale of television licences. Five million people pay for their licence at the post office every year. There are almost 15,000 Paypoint outlets, which is slightly more than the number of post offices. Paypoint said it would have 17,000 by 2007 and that its operations were open for an average of 100 hours a week.

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