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This note is not about trinitrotoluene but concerns the global carrier which started life as Thomas Nationwide Transport and whose orange vans are annoyingly ubiquitous; and in particular the implications of their recent case at the ECJ.

The prime aim of TNT in taking the case was to seek to overturn Royal Mail’s VAT exemption on postal services as unfair on Royal Mail’s competitors. In that they failed: but the Court examined the extent of the exemption and declared that it applied only to “universal postal services” – and not, therefore, to services which are individually negotiated.

This means that in some cases charges which have been paid to Royal Mail will have included an element of VAT: and in principle that element of VAT will now be recoverable subject to the usual cap on VAT reclaims. The businesses where a claim may be worthwhile will be those where there has been significant expenditure on individually negotiated services – typically Parcel Force charges or specialist additional services like addressing and sorting – and of course only where the business is taxable such that the VAT element can be recovered as input tax. Businesses whose dealing with the Post Office are limited to buying stamps and other “universal postal services” are not affected.

Can we help further on this? “Sure we can” – contact tax@bkltax.co.uk