Implementation date for revised VAT treatment of postage charges extended

A couple of weeks ago we met with CTG and HMRC and we made it clear that it was unacceptable for the industry to be expected to implement HMRC’s interpretation of how VAT in relation to postage charges should be applied when they still had not published any updated guidance. HMRC has now confirmed that although they will not be publishing anything themselves we can advise members that the implementation date has been extended.

HMRC have stated that they intend to publish updated VAT notices 700/24 and 701/10 on the 5th June together with a Revenue and Customs Brief explaining the changes on 5th June 2015 with an implementation date of 1st August – 4 months later than originally planned. If HMRC fails to publish the updated VAT Notices by 5th June they have also confirmed that the implementation date will be revised again accordingly.

This means that the “transitional period” when HMRC have agreed they will take no retrospective action against companies that applied VAT incorrectly will now end on 31st July 2015 and we remain in discussions with HMRC about the exact scope of this concession.