U.K. softens the VAT

Jun 01, 2000 9:30 PM  By

Catalog shopping became slightly cheaper in the U.K., thanks to a recent court ruling in favor of horticultural cataloger Plantiflor. The U.K. mailer challenged the tax code requiring the collection of a 17% value added tax (VAT) on domestic shipping charges, arguing that sending merchandise to buyers does not constitute a taxable service. In February, the Court of Appeal agreed, reversing a lower court ruling. The decision allows marketers to cease VAT collection on shipping within the United Kingdom.

Although the Court of Appeal denied the litigant, Great Britain’s Office of Customs and Excise, its right to present the decision to the House of Lords for a final appeal, Customs and Excise is reportedly preparing an appeal anyway. But for now, U.K. mailers can stop collecting VAT on their postage.