VAT and Postage

Hi, Just want to know if I have this correct as cannot find the answer anywhere else and will shortly be registering for VAT; 1. When working out my VAT Threshold I include the postage charged as well as the invoice amounts 2. When I charge VAT, I charge it on the goods sold and then add the postage afterwards

1. Your turnover is the amount you receive from your customer, so you are correct in including the postage cost as well as your invoiced amount (turnover). 2. You calculate VAT on the amount you receive from the customer, so you should add the price of the goods plus the postage together and then you add VAT to that (you charge VAT on the postage as well as the goods). 3. The VAT rate you use is based on the VAT rate of the goods you are posting. For example, if you are posting a mobile phone cover or a part for a car, these are standard rated goods, so you treat the postage and the goods themselves as standard rated. If you are posting a book or childrens clothing, these goods are zero rated and so you zero rate the goods and the postage. https://www.gov.uk/guidance/vat-on-postage-delivery-and-direct-marketing-notice-70024#delivered-goods

That's great, thank you so much Jason :)

Hi,

When considering your taxable turnover you would need to include postal charges in this turnover. Postal charges are a taxable supply and therefore would go towards your taxable turnover.
You can see guidance here:

Postage, delivery and direct marketing (VAT Notice 700/24)

Thank you.

Yup, when calculating your VAT threshold, include both the invoice amounts and the postage charges. It's the total shebang that counts. Absolutely right! Charge VAT on the goods sold, and then add the postage afterward. Keep that process rolling smoothly.