It’s the 2nd April today and Royal Mail business tariff price increases have come into effect and don’t forget that many services will also attract VAT. If you haven’t already done so you’ll probably want to adjust your postage prices and possible change to a new Royal Mail service which doesn’t attract VAT.
Royal Mail say that a new new payment channel for 1st and 2nd Class items by account is available today which will allow you to purchase with no discount but without paying VAT. To access this service simply use the new product code ‘BPL’, available on your OBA system which should be available today. You can continue to use your current PPI Licence and envelope/label stock. There is no need for any changes to your posting procedures.
If you use other services such as Royal Mail Tracked you will need to assess the impact on your business and bear in mind that that the across the counter stamp prices will rise on the 30th April.
What Royal Mail services will you stop using and which new services will you use in their place? Will you increase prices to your customers or will you choose to offer a slower cheaper services to remain competitive? As a buyer I’d prefer to pay a little more for a faster service, but with price rises of anything between 30% and 63% I’m not sure I want to pay that much extra. I’m pretty sure the vast majority of buyer don’t either!
12 Responses
This is doing my Head in!!
I am VAT Registered.
We currently have 3 codes that we can use for our domestic post:
STL
CRL
PBL
We used to use STL for our domestic letters and CRL for our domestic Large Letters & packets.
I have just run some examples through the OBA and it seems, for me anyway, that i should use PBL for letters & large letters as well as packets under 500gm and for packets over 500gm, i should use CRL.
The examples i used were:
110gm packet 1st class
STL £2.83 inc VAT
CRL £2.63 inc VAT
BPL £1.69 inc VAT (VAT Exempt)
510gm packet 1st class
STL £2.83 inc VAT
CRL £2.63 inc VAT (£2.19 + 44p VAT)
BPL £2.36 inc VAT (VAT Exempt)
760gm packet 1st class
STL £3.95 inc VAT
CRL £3.08 inc VAT (£2.57 + 51p VAT)
BPL £2.86 inc VAT (VAT Exempt)
Am i missing something here!!
Lee
.
We’ve put this notice on all our listing;
PLEASE NOTE:
Our P&P Charges are based on what Royal Mail charge us.
FROM 30th APRIL 2012
Due to the extremely high Royal Mail postal Prices increase on the above date, our default postal prices will be the slower 2nd Class service [with NO rise in cost], with the option for YOU to choose the 1st class service if you want to pay the increase.
All Online Sellers have this problem, so have to address it too.
We regret having to do this, but with a plus 30% increase, have NO choice.
– – – – –
The VAT paid to RM can be reclaimed as it would be on any other product you resell so you would need to run your calculations excluding VAT which would make CRL cheaper apart from any mailing which averages under 500g (although don’t quote me on this figure)
Used the BPL code today to see what prices we get compared to before. It actually worked out cheaper before VAT on the STL prices and aren’t the prices going up at the end of the month?. What is the BPL code??
Great tip there, something to look into!
I bet many are having a nightmare today, updating postal prices online :s