VAT changes to Royal Mail products

As of 31st January 2011 VAT at the standard rate will be applied to a small number of Royal Mail products that are currently available on your FP franking machine.

When these services are purchased at a Post Office counter, the VAT can be charged and a receipt is given, whereas one of the huge benefits of franking machines is that you don't need to go to the Post Office counter!

Therefore, the franking machine now needs to identify individual products and pass that information to Royal Mail. Royal Mail is calling franking machines with this capability "Smart franking machines".

How will I be affected by these VAT changes?

All of Royal Mail standard products will continue to be exempt from VAT and therefore no change will be made to these tariffs of 31st January. However, there are a few Royal Mail products, that when selected with additional services will be subject to VAT, they are as follows:

Special Delivery before 9am
Special Delivery before 9am guarantees delivery by 9am the next working day, almost anywhere in the UK and you can claim compensation up to £50 or the value of the item, whichever is the lower.

Special Delivery Saturday Guarantee
Special Delivery Saturday Guarantee guarantees delivery on Saturdays almost anywhere in the UK at an additional cost of £2.25 per item with up to £2,500 in compensation cover included.

Special Delivery Next Day with consequential loss from £1,000
This is not when you are sending a standard special delivery item it is only if you apply separately for Consequential Loss cover which is an additional service on top of special delivery and entitles you to extra compensation should something go wrong.

International Airsure to EU only destinations
This is a fast, reliable and secure service, where items are scanned at 6 different points, from collection in the UK to delivery overseas. This is not how you would send a standard letter to the EU this service is called Airmail - Airmail is not affected.

International Signed For with Advice of Delivery to EU only destinations
This is a secure delivery service that requires a signature on delivery. It is available to all worldwide destinations with standard compensation covering up to 100 times the price of the First Class fee (currently £41) or the content value, whichever is lower.

Standard Parcels with additional compensation
This is not when you are sending a standard parcel it is only if you request the extended compensation cover up to £500 which is an additional service on top of sending your parcel and entitles you to extra compensation should something go wrong.

Please note that the standard products "Special Delivery Next Day", "International Airmail" and "Standard Parcels" are not effected.

Are there any other changes?

The only tariff changes (i.e. not VAT related) on 31 January will be International Signed For and Parcelforce (Please note: Parcelforce is only available on scales that weigh 10kg or over). However, as it is probable that there will be a Royal Mail full tariff increase in April 2011, you may prefer to wait until then if you only use these products occasionally. If you do want to use International Signed For at all between 31 January and the full tariff change in April, please be advised the new rate as of 31 January 2011 will increase to £4.95.

Please refer to the Parcelforce website for their up-to-date price list.

What do I need to do if I don't use any of the above products?

Nothing - you can forget and relax!