Is there VAT on franking machine postage?

30 July 2014

Back in 2011, the Royal Mail introduced VAT charges to a limited number of products, and in 2012 this was extended further to other business services. Below are the parcel despatch services that are currently VAT liable:

  • Special Delivery Guaranteed by 9am™ (stamps, franking and account)
  • Special Delivery Guaranteed by 1pm™ (account)
  • Royal Mail Tracked 24 and Royal Mail Tracked 48
  • Royal Mail Sameday®
  • Royal Mail 1st and 2nd Class Account Mail (formerly Packets)
  • Royal Mail Signed For™ will also become liable to VAT if purchased as an add-on to a standard rated service. In all other circumstances it will remain VAT exempt.

If your business is registered for VAT, and sells taxable goods or services, then you should be able to reclaim the VAT through your VAT return.

By using a franking machine with SMART technology, reclaiming VAT on your mail is simple. A SMART franking machine franks your mail at the VAT-inclusive price and allows VAT to be reclaimed through the production of a VAT invoice.

The below services remain exempt from VAT:

  • 1st and 2nd Class (stamps, online, franking, account*)
  • Special Delivery Guaranteed™ (stamps and franking)
  • Royal Mail Signed For™ (if purchased with a VAT exempt service)
  • Keepsafe™ (personal and business)
  • International Standard
  • International Economy
  • International Signed, International Tracked, International Tracked & Signed
  • All HM Forces Mail (BFPO)
  • Redirections within UK (personal and business)


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