Postage Stamps and Philatelic Supplies

HMRC Reference:Notice 701/8 (November 2003) View Change History
 

Contents

Foreword

1. Introduction

1.1 What is this notice about?

1.2 What has changed?

1.3 Who should read this notice?

1.4 Related publication

2. Stamps valid for postage in the United Kingdom

2.1 Why are some stamps VAT free?

2.2 Which stamps are valid for postage?

2.3 Valid United Kingdom or Isle of Man Postage stamps

2.4 Stamped stationery

3. Other stamps

3.1 Used stamps

3.2 Foreign stamps

3.3 Unused, invalid United Kingdom and Isle of Man stamps

3.4 Value for VAT of stamps treated as collectors’ items

4. First day covers and other philatelic supplies

4.1 What is a first day cover?

4.2 Sale prior to posting of first day envelopes and stamps

4.3 Arranged posting

4.4 Subsequent sale of first day covers and collectors’ items

4.5 All other philatelic supplies

5. Philatelic collectors’ items

5.1 VAT liability

5.2 Value for VAT of philatelic supplies treated as collector’s items

5.3 Imported collector’s items

6. Postage and packing/delivery charges

6.1 Postage and packing/delivery charges

Do you have any comments?

 

Foreword

This notice cancels and replaces Notice 701/8 (April 1997). Details of any changes to the previous version can be found in paragraph 1.2 of this notice.

Further help and advice

If you need general advice or more copies of Customs and Excise notices, please ring the National Advice Service on 0300 200 3700. You can call between 8.00 am and 8.00 pm, Monday to Friday.

If you have hearing difficulties, please ring the Textphone service on 0300 200 3719.

If you would like to speak to someone in Welsh, please ring 0300 200 3705, between 8.00 am and 6.00 pm, Monday to Friday.

All calls are charged at the local rate within the UK. Charges may differ for mobile phones.

1. Introduction

1.1 What is this notice about?

This notice explains which postage stamps are free of VAT and when VAT must be applied to:

  • stamps;
  • stamped stationery; and
  • other philatelic supplies.

1.2 What has changed?

This notice has been restructured and rewritten to improve readability, but the technical content has not changed from the November 1997 edition.

You can access details of any changes to this notice since November 2003 on our internet website at www.hmce.gov.uk or by telephoning the National advice Service on 0300 200 3700.

This notice and others mentioned are available both on paper and on our website.

1.3 Who should read this notice?

This notice will be of interest to

  • Post offices and other sellers of postage stamps;
  • Stamp dealers; and
  • Suppliers of other philatelic materials.

1.4 Related publication

Notice 700/24 Postage and delivery charges.

2. Stamps valid for postage in the United Kingdom

2.1 Why are some stamps VAT free?

Valid United Kingdom and Isle of Man stamps are the payment for a postal service that is exempt from VAT.

2.2 Which stamps are valid for postage?

Valid postage stamps are unused stamps of the present monarch’s reign on which the value is:

  • £1, or a multiple of £1
  • in decimal currency; or
  • designated for 1st or 2nd class postage.

2.3 Valid United Kingdom or Isle of Man Postage stamps

  • If you sell unused United Kingdom or Isle of Man stamps that are valid for postage no VAT is chargeable if you sell them at or below face value. However, you must account for VAT at the standard rate on any amount by which the price you charge exceeds their face value.

2.4 Stamped stationery

If you sell stamped stationery that is unused and valid for postage in the United Kingdom or Isle of Man, you should account for VAT at the standard rate on the amount you charge less the face value of the stamps.

This applies whether the stamps are printed on the stationery or are ordinary postage stamps that have been stuck on.

3. Other stamps

3.1 Used stamps

  • All used stamps are taxable at the standard rate.

3.2 Foreign stamps

All foreign stamps, even if they are valid for postage abroad, are taxable at the standard rate.

3.3 Unused, invalid United Kingdom and Isle of Man stamps

United Kingdom and Isle of Man stamps of earlier reigns or which have a value expressed in shillings and/or old pence are no longer valid for postage and are therefore taxable at the standard rate.

3.4 Value for VAT of stamps treated as collectors’ items

If you sell stamps that are not valid for postage they may be able to be treated as collector’s items – see section 5.

4. First day covers and other philatelic supplies

4.1 What is a first day cover?

A first day cover is an envelope bearing postage stamps with a postmark of the first day of their issue.

4.2 Sale prior to posting of first day envelopes and stamps

If you sell an envelope with unfranked stamps (whether the stamps are fixed to the envelope or not) for your customers to post themselves, you can disregard the face value of the unused stamps and account for VAT on the rest of your charge only.

4.3 Arranged posting

If you arrange for the envelope with the new stamps to be posted to your customer on their first day of issue, you must account for VAT at the standard rate on the full selling price of the first day cover. You cannot deduct the face value of the stamps from the taxable amount.

4.4 Subsequent sale of first day covers and collectors’ items

First day covers and other philatelic collectors’ items are taxable at the standard rate. However they may be eligible for the Margin Scheme for second-hand goods, works of art, antiques and collectors’ items - see section 5.

4.5 All other philatelic supplies

If you sell any other philatelic items which consist of, or contain, stamps that are unused and valid for postage in the United Kingdom or the Isle of Man, you should account for VAT on the full amount that you charge less the face value of the valid stamps.

You should account for VAT on other philatelic supplies on their full value.

5. Philatelic collectors’ items

5.1 VAT liability

Philatelic collector’s items are liable to VAT at the standard rate, however the tax may not always be due on the full value.

5.2 Value for VAT of philatelic supplies treated as collector’s items

Collections and collectors' pieces of philatelic interest may be treated as collectors’ items and you may be able to account for VAT on the difference between your purchase and selling price. You can find further information in Notice 718 Margin scheme for second-hand goods, works of art, antiques and collectors’ items.

In Notice 718 you will find details on the Margin Scheme and the optional system known as Global Accounting. The notice also includes a definition of goods that are eligible for the scheme, and explains the conditions and record keeping requirements.

If you do not meet the conditions of the scheme, VAT will be due on the full selling price.

5.3 Imported collector’s items

Some items of philatelic interest are eligible for a reduced valuation at importation which gives an effective VAT rate of 5%. This figure is reached by calculating a value for duty and multiplying the total by 28.58%. Applying the 17.5% rate to this value gives an effective VAT rate of 5%. You must see Notice 702 Imports for full details.

6. Postage and packing/delivery charges

6.1 Postage and packing/delivery charges

When considering the VAT liability of delivery charges you will need to consider whether delivery is included in the contract with your customer. If it is, you are making a single supply of delivered goods (in the case of philatelic supplies) or services (in the case of valid postage stamps). The liability of the delivery or postage & packing charge follows that of the items being delivered, that is standard-rated in the case of philatelic supplies or exempt in the case of valid postage stamps. You can find more about this in Notice 700/24 Postage and delivery charges.

Do you have any comments?

We would be pleased to receive any comments or suggestions you may have about this notice. Please write to:

HM Customs and Excise
Social Reliefs Team
4th Floor West
New Kings Beam House
London
SE1 9PJ

Please note this address is not for general enquiries. You should ring our National Advice Service about those.

If you have a complaint or suggestion

If you have a complaint please try to resolve it on the spot with our officer. If you are unable to do so, or have a suggestion about how we can improve our service, you should contact one of our Regional Complaints Units. You will find the telephone number under ‘Customs and Excise - complaints and suggestions’ in your local telephone book. Ask for a copy of our code of practice ‘Complaints and putting things right’ (Notice 1000). You will find further information on our website at http://www.hmce.gov.uk.

If we are unable to resolve your complaint to your satisfaction you can ask the Adjudicator to look into it. The Adjudicator, whose services are free, is a fair and unbiased referee whose recommendations are independent of Customs and Excise.

You can contact the Adjudicator at:

The Adjudicator's Office
Haymarket House
28 Haymarket
LONDON
SW1Y 4SP

Phone: (020) 7930 2292

Fax: (020) 7930 2298

E-mail: adjudicators@gtnet.gov.uk
Internet: http://www.adjudicatorsoffice.gov.uk/

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