Postage not a separate supply

The taxpayer company sold novelty items through eBay Amazon and its own website. Customers could opt to collect the goods from the premises or pay an extra charge to have them delivered.

The appeal concerned whether sums paid by customers for postage should be treated as disbursements on the basis the taxpayer was acting as an agent of its customers or whether they were part of the consideration for a single supply of “delivered goods”.

The sums in the former case would not be liable to VAT because postal services provided by Royal Mail are generally exempt; in the latter case the whole charge would be standard rated.

The First-tier Tribunal found the facts pointed to a single supply of delivered goods by the taxpayer. Customers made a single payment for the goods regardless of the fact the postage charge was identified separately.

There was...