VPOST4550 - Scope of the exemption: terminal dues
‘Terminal dues’ is a mutual assistance agreement between the postal authorities in different countries across the world. On behalf of overseas postal authorities, Royal Mail delivers mail received from abroad from its point of entry in the UK to its final destination in the UK. In return, foreign postal authorities deliver mail coming from the UK from its point of entry to its final destination in their own territory.
Up to 31 December 2020 (end of BREXIT transition period)
Under an informal EU-wide agreement, all EU terminal dues were treated as exempt from VAT.
Terminal dues received from non-EU postal authorities were outside the scope of UK VAT, with the right to input tax recovery.
From 1 January 2021
All terminal dues received from outside the UK are outside the scope of UK VAT, with the right to input tax recovery.