Charging VAT on delivery, is it legal ?

[deanos]

Just wondering is it legal to charge VAT on delivery ?
I saw it mentioned somewhere on here that it is illegal, now im not sure if that is for Royal Mail or private delivery firms ?

Does anyone know anything on this subject , thanks.

[SteveyJ]

I **think** viking do, but cant be 100% sure!

[Gromit]

Not too sure but isn't delivery classed as a service and hence eligible for VAT? This seems to be how they view it for foreign deliveries. The £18 threshhold applies to the goods but if you exceed the £18 limit you are liable to VAT and duty on the postage cost and the cost of the goods :(

[marlot]

I vaguely remember that 15 or so years ago you weren't charged VAT on the delivery, and that some companies evaded VAT by charging you 1p for the goods and £50 for the delivery. The government closed the loophole by making the shops charge VAT on the whole bill.

[BigH]

methinks courier charges are Vatable, but postage stamps from the PO are zero rated

[White Line]

Where's the legal experts when you need 'em? Anyway, I think that as delivery can be classed as a service, it's probably illegal NOT to pay VAT on it. Whether they choose to charge you it is up to them.

I reckon that whatever you pay for say Amazon, the VAT is already included in that charge, others would stick it on top after. I'm going to stop typing now because I really don't know and I'm just guessing.

:)

[deanos]

Im just wondering because say Scam i mean Scan if i was to buy say a Smartmedia card they would post it i presume as its so light, and they would charge £10 + £1.70 vat = £11.70. ( i presume they would use recorded post office delivery at £3.60)

Do you see what im getting at ?

[marlot]

Most companies quote the delivery charge including VAT. ie if it says £10 you normally pay £10, not 11.70.

[peter@interdvd.co.uk]

When importing, Customs treat delivery as part of the product so yes it is vatable.

If your goods in dollars work out to be e.g. £1000 and Fedex charge the equiv of £100 for delivery Customs charge VAT at 17.5% on £1100.00


Hope this helps

[CrumpetMan]

Originally posted by deanos
Im just wondering because say Scam i mean Scan if i was to buy say a Smartmedia card they would post it i presume as its so light, and they would charge £10 + £1.70 vat = £11.70. ( i presume they would use recorded post office delivery at £3.60)

Do you see what im getting at ?

I think Scan use city link no matter how small the order. I'm sure a friend of mine ordered a stick of ram and it arrived in bubble wrap the size of a shoe box!

[bigsimes]

Originally posted by marlot
Most companies quote the delivery charge including VAT. ie if it says £10 you normally pay £10, not 11.70.

I place orders for lotsa kit, and usually it's quoted at price + delivery + vat. Meaning that the delivery charge is subject to vat.
Therefore delivery of £10 ends up being £11.75...

[dtsrules]

I ordered something and it said $80 on the box, i have just had my bill from FedEx for £15.04 vat 2.83 duty and £4.50 admin. This total is $40 which is half of the original price, is this right?

[ic]

Originally posted by dtsrules
I ordered something and it said $80 on the box, i have just had my bill from FedEx for £15.04 vat 2.83 duty and £4.50 admin. This total is $40 which is half of the original price, is this right?
It looks like they've used a very unfavourable exchange rate to calculate the charges - query it with them. According to the Customs FAQ, the £4.50 admin charge is standard for FedEx.

To answer the original question, yes delivery charges are liable for VAT.

Ian

[Crazy Squirrel]

$80 = £44.44 (taking a $1.8=£1 exchange rate), VAT(@17.5%) would be £7.78

To get £15.04 VAT it would have had to be £85.94, which is $154.69 (@1.8)
Or £85.94 would be $80 with a $0.93=£1 exchange rate :eek:

Sounds dodgy to me, unless your postage was $75 ish...


I'm expecting a $180 + $30del package today, I was hoping delivery wasn't included as it is international, but from what i read above i'm wrong.
I mean most of that delivery cost was for a service outside of the UK i.e. to the airport & the plane journey....

[Kartikp]

Companies HAVE to charge VAT on delivery.

[caygs]

Originally posted by dtsrules
I ordered something and it said $80 on the box, i have just had my bill from FedEx for £15.04 vat 2.83 duty and £4.50 admin. This total is $40 which is half of the original price, is this right? http://www.thedvdforums.co.uk/forums/showthread.php?s=&threadid=259962 should help

[ian-n]

Originally posted by deanos
Im just wondering because say Scam i mean Scan if i was to buy say a Smartmedia card they would post it i presume as its so light, and they would charge £10 + £1.70 vat = £11.70. ( i presume they would use recorded post office delivery at £3.60)

Do you see what im getting at ?

I know this isn't the point you're making but I believe Special Delivery does include an element of VAT already (as it is a delivery service), it's just basic stamps that are either VAT free or zero-rated. Thus it is perfectly fine for Scan to pass on the VAT to you (that being the whole point of VAT, an end-user tax).

Effectively they are considering the delivery service as a £3.06 item (£3.06 + 54p vat = £3.60) and reselling it as a £10 item (plus £1.75 for the VAT man) thus making for themselves a handy £6.94. Nothing illegal about that although you might consider such a big markup to be a bit greedy and thus choose to shop elsewhere!

[target]

ALthough, as pointed out above, scan will use next day city link if you order so much as a floppy disk. So they probably aren't marking the postage up that much. Use the free delivery offer for ebuyer (see bargain forum) instead :)

[abarthman]

If I understand this (http://www.businessmag.co.uk/news/2002sep/n0902010.html) and this (http://www.booksellers.org.uk/newlibrary/document_view.cfm?document_id=246) correctly, it looks as though postage on zero-rated items is zero-rated, but the House of Lords have recently determined that VAT is payable on Royal Mail/Parcel Force delivery charges.

I think .... :confused:

[graham.myers]

Originally posted by Kartikp
Companies HAVE to charge VAT on delivery.

When I had my own computer business I got a VAT inspection (you get one within the first 18 months of being VAT registered)

during this review they picked up on the fact I was not charging VAT on the postage. I said but the PO is VAT exempt. Yes, they said, but you're not - you are offering a service - postage - and you must charge VAT on that service.