Please can anyone tell me if, when buying something online, VAT is payable on Postage and Packing?  The reason I ask is because I have just ordered something and the VAT was calculated on the whole total, which included a sum for postage and packing. Is this right?  Not that it amounted to much, but I just wondered whether P & P was yet another thing liable for tax :D

Thank you!

Lesley

Yes....the VAT man likes his slice of everything including P & P

Thanks Sponge! I suspected as much ;)

Lesley

Hi,
I had the same thing a while ago, ordered something off the internet and when the receipt came it showed that i had payed VAT on the P&P, i rang the company to make sure i was reding the receipt correctly and they said i was so i rang trading standards to check this out as i thought it didnt seem right, they told me that they can charge you VAT on P&P, seems a little unfair to me as you are already paying VAT on the item too.
Kez

Hi Kez,

It does seem a bit unfair, although I suppose we shouldn't be surprised :D  I'm sure someone who loves paying taxes (or collecting them ;) ) will be along to explain to us why P & P attracts Vat though! It just seems an odd thing to tax!!

Lesley

I don't know if postage and packing is considered a service and therefore subject to VAT but there isn't any VAT on stamps as far as I am aware.

I think that it is considered part of the sale - if the company didn't charge P&P separately, it would be hidden in the cost of the item. Just a part of the normal company expenses - it is just down to the individual company to 'charge' you or not - you still pay for it in the end :(

Daisy

There is no VAT on postage.  But, if a company charge postage and packing the 'whole' becomes a service and is charged as a whole. The company have to show postage and packing as a service on their VAT return and VAT is paid over on full charge including postage.

Kay

Thank you Kay, I knew someone would have the full answer!  So its a cunning way for the government to gather some tax on something that isn't normally taxed, ie stamps :D  Adding on from this then, does anyone know if the company that supplies the product pays VAT when they purchase the product from the manufacturer?  If they do, then an amount for VAT gets paid twice on the same thing, once by the supplier and then again by the purchaser from the supplier!  Double taxes!!!!  Thank goodness we have the vote to make up for it :D :D

Lesley

No - the end user only pays 17.5% on the end sale price (net of any taxes) - any tax paid is reclaimed by all the suppliers back in the chain (as long as they are registered for VAT). There are many costs included in the end price that are zero-rated - ie wages, postage - but the total sales price of the goods must have VAT added (as long as it itself isn't zero-rated).

Daisy

Thank goodness for that Daisy!  Thank you!  I'd have been scandalised if it had turned out that VAT was paid twice

Leslet