Currently, Royal Mail enjoys a VAT-free status, giving it an advantage over other postal companies when bidding for contracts with other organisations which are also VAT-exempt.
But the postal regulator wants to end this special status and according to The Independent wants the Treasury to introduce a 5& VAT charge.
Royal Mail though said its customers would not benefit by the levelling of the playing fields. A first-class stamp would rise by 1p, which it said would put Postcomm at odds with its duties, namely to protect consumers from unnecessary price rises.
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