Regulator calls for postage stamp tax
Sending letters could become more expensive after the Treasury faced calls to introduced VAT on postage stamps.
Postcomm, the postal regulator, is hearing views from the Royal Mail and private companies entering the market, but is understood to considers a 5% tax as one of the best options.
It is concerned the Royal Mail’s VAT exempt status gives it an unfair advantage because competitors must levy the full 17.5%, The Independent reported.
The Treasury said it was opposed to the creation of a literal ‘stamp duty’. But it said it would continue to monitor the VAT position as it supported the creation of a ‘level playing field’ in the sector.