DMA backs axing of UK Royal Mail tax break
The DMA (UK) has welcomed Postcomm’s bid to axe Royal Mail’s VAT exemption, calling the privilege out of date and distorting to competition.
However, the trade body admits it can only continue to support the proposals if charities and financial services organisations receive some reimbursement to ensure they are not put at a disadvantage. The DMA says the historic argument in favour of the exemption, passed as an EU directive in 1977, was that it facilitates a universal postal service – but the market has changed dramatically since then. With more postal operators entering the UK market and paying VAT at 17.5 per cent, competition would be distorted.
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