The price of using numerous Royal Mail services will rise in April 2012 when changes to the VAT law come into effect. Some Royal Mail services became subject to VAT in 2011, but from April all bulk mail services will attract VAT at 20%.
Some core services will remain unaffacted and unVATed including First and Second Class mail, Standard parcels, International Airmail, International Surface Mail and all HM Forces Mail (BFPO).
For a full list and FAQs there’s a page on the Royal Mail website.
How will this affect your business? Obviously, VAT registered companies can claim this back (but there is a impact on cashflow). Will it drive you away from Royal Mail? Or is it just a cost that can be passed onto buyers?