There can be VAT on postage in the UK, but it depends entirely on who you are buying the service from and how you are charging it to your customer.
Stamps and postage under Royal Mail’s universal service are VAT-exempt. Couriers such as DPD, Evri, DHL and UPS charge 20% VAT. If you charge your customers for delivery, VAT on postage usually follows whatever you are selling.
In this guide, we will look into the VAT on postage rules in detail, including:
- Do you pay VAT on postage when you buy it?
- Do you charge VAT on postage to your customers?
- Can you reclaim VAT on postage?
- And much more…
And if you would rather skip the reading and have specialist VAT accountants look at your situation, you can just get in touch with us at Accotax.
Below are the rules around VAT on postage, divided by whether you are buying postage for your business or recharging delivery costs to a customer.
Do You Pay VAT on Postage When You Buy It?
The VAT you pay when you buy postage depends strictly on the carrier and on the specific service type:
| Delivery provider | VAT on postage? |
| Royal Mail stamps and universal service postage | No (exempt) |
| Some other Royal Mail services and business contracts | Can be 20%, so check your invoice |
| DPD, Evri, DHL, UPS, FedEx | Usually 20% |
| Parcelforce | Usually 20% |
Remember that Royal Mail sells a mix of services. And not all of them come under the exempt universal service. Therefore, you need to make sure that you are always checking it on the invoice instead of assuming anything. If VAT has been charged, the VAT line on your invoice will tell you straight away.
Note for VAT-registered businesses: You can reclaim the 20% VAT on premium Royal Mail or private courier invoices as input tax. You cannot reclaim VAT on standard stamps because no VAT was ever charged.
What If Delivery Is Free?
In some cases, if you offer free delivery or include the delivery cost in the selling price, you generally account for VAT on the full sales price according to the VAT liability of the goods.
Do You Charge VAT on Postage to Your Customers?
Yes. You generally must charge VAT on delivery and postage to your customers if the goods you are selling are standard-rated for VAT.
A common point of confusion for businesses is that standard stamps or Royal Mail delivery services are themselves exempt from VAT when you buy them. However, the moment you recharge those postage costs to a customer as part of an order, the delivery becomes part of a single transaction (a contract for “delivered goods”).
Where delivery is required under the contract for the supply of goods, the delivery charge forms part of the supply of delivered goods and generally follows the VAT liability of those goods. However, where delivery is a separate service, its VAT treatment can be different.
To determine the VAT on your postage charges, the tax rules depend entirely on what is inside the package you are sending:
| If you are selling… | VAT on the postage charge | Practical Example |
| Standard-rated goods (20%) | 20% | You sell an adult t-shirt for £20 and charge £5 for postage. You must apply 20% VAT to the entire £25 total. |
| Zero-rated goods (0%) | 0% | You sell a printed book or children’s clothes. Because the items are zero-rated, no VAT is added to the postage fee. |
| Exempt goods | Exempt | If you are selling an item or service that is exempt from VAT, the postage fee is also exempt. |
| Mixed Order | Apportioned | If a customer orders a mix of standard-rated (adult clothes) and zero-rated items (children’s clothes), you must split the delivery charge and apply VAT proportionally. |
Note: It does not matter if you used a VAT-exempt Royal Mail stamp to send the package. If the item inside the box is standard-rated at 20%, you must charge your customer 20% VAT on the postage fee you bill them.
What About Mixed Orders: Is VAT on Postage Applied To Them?
If a customer orders a mix of standard-rated and zero-rated items in the same package, you must apportion the delivery charge fairly. Yes, either by weight, volume, or value. Then you need to apply the respective VAT rates to each portion.
The VAT on postage for that order does not have to be all 20% or all 0%. In most cases, you can split the delivery charge fairly. For example, by value or by weight, and apply the right rate to each part. You need to pick a method that makes sense for your business and then stick with it.
Also write down how you did it, because you may need to explain it later.
What About Disbursements?
In very narrow instances (common for lawyers or accountants), if you pay for postage on behalf of a client, in their name, and simply pass the exact cost on to them, it may count as a disbursement. In that case, you may not need to add VAT on postage when you recharge it.
However, this requires strict adherence to HMRC VAT Notice 700/24.
The specific disbursement conditions must be satisfied, including that the client receives the supply and that you recover the actual amount paid rather than treating the cost as your own supply.
Can You Reclaim VAT on Postage?
If you are VAT registered, you can reclaim the VAT on courier invoices. This applies if the delivery relates to your business sales and you hold a valid VAT invoice.
What you cannot do is reclaim VAT on Royal Mail stamps. Because these services are exempt from VAT, meaning no tax was charged in the first place.
Is VAT Charged on Optional Delivery in the UK?
If a customer can choose to purchase a separate delivery service that is not required under the contract for the goods, the delivery charge is generally treated as a separate supply and is standard-rated. This can be different from delivery that forms part of a contract for delivered goods.
So, Is Postage Exempt or Zero Rated?
People often mix up these two terms, exempt and zero-rated. But they mean different things for your accounts. As discussed, universal postal services from Royal Mail are strictly exempt. It means no VAT is charged. Also, they do not count towards your taxable turnover calculations.
On the flip side, if you charge customers for delivery as part of a sale of standard-rated goods, the delivery fee takes on the same VAT rate as the product. If you sell standard-rated goods, your postage charge to the customer becomes standard-rated too. Yes, even if you use exempt Royal Mail services to send it.
How Accotax Can Help
It becomes easy to keep track of VAT on postage when you know exactly which rules apply to your business.
At Accotax, our chartered accountants make sure every penny of VAT on postage is handled correctly under current rules so you never pay a pound more than you owe.
If you have already been charging it wrongly, we can help you sort that out with HMRC calmly and properly. And once it is set up, you can get back to running your business instead of reading VAT notices at midnight.
Get in touch with us today if you need practical support with your business VAT.
The Bottom Line
So, is there VAT on postage in the UK? Sometimes, yes. It depends on the postal service you use and how you charge customers for delivery.
Qualifying Royal Mail services are generally exempt, while most courier services attract 20% VAT. For businesses, the bigger consideration is how delivery fits into the sale itself.
If you are still unsure, get in touch with VAT specialist accountants before your next VAT return goes in.
Disclaimer: All the information provided in this article on There is VAT on postage, including all the texts and graphics, is general in nature. It does not intend to disregard any of the professional advice.
