Do you pay vat on franked mail
In the UK, franked mail is mail that has been franked, or stamped, by a franking machine, which is a machine that prints the postage and franking mark on the envelope. The franking machine is typically used by businesses and organizations to send large volumes of mail.
When it comes to VAT (Value Added Tax) on franked mail, the answer is generally no, you do not pay VAT on franked mail. Here's why:
- Zero-rated: In the UK, franked mail is considered zero-rated for VAT purposes. This means that the value of the franked mail is not subject to VAT.
- Exempt from VAT: Franked mail is also exempt from VAT under the VAT Act 1994, Schedule 8, Group 5. This exemption applies to "postage stamps, postal orders, and other similar documents" that are used to pay for the transmission of goods or services.
- No VAT on franking machine: The franking machine itself is also not subject to VAT. The cost of the machine and the franking ink is considered a business expense, and you can claim it as a deduction against your VAT-registered business income.
However, it's important to note that if you are using franked mail for a specific purpose, such as sending invoices or receipts to customers, you may need to account for VAT on the value of those documents. In this case, you would need to charge VAT on the value of the documents and account for it on your VAT return.
In summary, franked mail is generally zero-rated for VAT purposes, and you do not pay VAT on the franked mail itself. However, if you are using franked mail for a specific purpose, you may need to account for VAT on the value of those documents.