How the Post Office makes money

I have now worked out what the Royal Mails plan is to pull it out of the state it currently finds itself in. It appears that their delivery quota is diminishing, they want to abandon your mail at your neighbours, and now it appears that they are charging exorbitant amounts for collecting VAT on imported goods!

Let me explain;

My daughter has recently become the proud owner of a MacBook Pro, a lovely machine, but one that needs protecting whilst away from home. A case was required – not a straightforward matter it appears if you are 18 and like things to be a bit different! Consequently the case of choice was ordered from the USA. This is not a problem normally, in fact quite often deliveries from the US arrive quicker than UK ones!

No, the issue here was that the package required the payment of VAT on the purchase price, a service that the Royal Mail now appear to provide. However, the VAT sum that needed collecting was £4.42, not a huge amount, but, the “handling fee” taken by the Royal Mail at their sorting office (in cash only – no cards), was £8! – total £12.42!

Now I am happy to pay them a fee for collecting on behalf of the Inland Revenue – but twice the sum collected, that is really taking the mickey! Not a huge amount of “handling” involved as far as I can see!

So once again the Royal Mail have endeared themselves to me even more!

 

Reduce VAT on energy saving improvements?

With the economy very much ‘on the edge’ and looking likely to fall into recession again, our leaders are suggesting various ways of stimulating the economy. It seems likely that some form of quantitive easing will be used again, but how about being a bit more intelligent with it rather than just printing money?

The suggestion that the Government should reduce VAT to 5% for all energy-saving measures installed in homes and businesses under its “green deal” scheme, makes total sense to me.

More than two dozen organisations have called for an across-the-board 5% VAT rate for the green deal, instead of 20%, which they say is needed to ensure take-up of the programme to reduce carbon emissions from buildings and cut fuel bills.

The demand which has come just as the Government is finalising the green deal, has come from groups including the British Property Federation, the UK Green Building Council, environmental charity WWF and the Royal Institution of Chartered Surveyors. The green deal scheme will cover the upfront costs of a range of energy efficiency measures in homes, such as insulation, energy-efficient boilers and small-scale renewables, with homeowners paying back the money through savings on their bills.

But the groups warn the Government must do more to make energy-saving packages attractive to householders, making the green deal more affordable in order for it to be a success. A lower rate of VAT would also make it easier to meet the so-called “golden rule” in which repayments must be lower than the savings consumers make on their bills as a result of the new measures.

There is no doubt something needs to be done to attract people to energy-saving measures, recent research has shown some people can’t be bothered to add insulation to their roofs and walls despite guaranteed savings. Perhaps this would act as the catalyst?