Print Monthly: Mailing body welcomes Ofcom VAT ruling

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Print Monthly: Mailing body welcomes Ofcom VAT ruling

The Strategic Mailing Partnership (SMP) has welcomed a ruling from watchdog Ofcom that a new Royal Mail wholesale economy service should be exempt from VAT.

The ruling means SMP members will save money on mailings made through the new D+5 Letters access service, which defers mail until there is another item being delivered to an address for up to four days after it enters the network.

In its ruling, Ofcom said that under HMRC rules, the service will be VAT exempt, in line with the D+2 service.

The changes come into force on April 5th, the start of Royal Mail’s new financial year, giving customers sufficient time in to develop systems and update pricing, avoiding the additional complication of VAT credit notes.

Ofcom added that it anticipated the D+5 service would become an important tool in maintaining effective competition in bulk mail services.

SMP chair Judith Donovan comments: “This is great news for SMP members as it means they will not have the added expense of VAT to pay. Anything that simplifies the process or reduces cost is extremely welcome.

“The new economy service offers excellent value and is just another way our members can make the most of the continuing interest in direct mail.”