Businesses could lodge VAT claims for using Parcelforce

Specialist chartered accountants and business advisors Mitchell Charlesworth have revealed that businesses such as mail-order firms and internet retailers including Royal Mail’s Parcelforce subsidiary, are potentially eligible to backdate VAT reclaims going back four years following an HM Revenue and Customs (HMRC) ruling.
Royal Mail is being forced to introduce VAT on a number of its services after losing a European Court of Justice case with private sector distributor TNT.
In its legal battle TNT argued that it was at a competitive disadvantage with Royal Mail because it was subject to VAT in the business post market.
Among the services that could be affected are ones that have been individually negotiated, including Parcelforce, door-to-door (unaddressed mail) and mailroom services.
Colin Corder, VAT manager at Mitchell Charlesworth, which has offices in Liverpool, Manchester, Chester, Warrington and Widnes, said: “Thousands of businesses across the region could potentially benefit.
“The European Court of Justice held that Royal Mail should have been charging VAT all along and it is this ruling that could lead to the possibility of backdated claims.
“Several organisations have already lodged VAT reclaims on the back of this case and now HMRC has confirmed it will now consider such claims.
“Although Royal Mail has yet to announce where VAT will fall, Parcelforce and business post could well be the first in line.”