Reports are that Royal Mail is seeking an extension of the regulation under the universal service obligation (USO) to encompass its tracked parcel services. This would mean that customers would no longer be charged VAT on tracked parcel rates using Royal Mail’s services, making the offering significantly more competitive.
Given that Royal Mail provides the tracked parcel services at the same ‘universal’ rates to all UK postal addresses, this would seem to bear consideration. Other operators charge a premium for delivery to remote areas of the UK.
The market awaits Ofcom’s proposals for the future of the USO, due in September, following its lengthy review of the current, seemingly untenable terms and how they might be amended given falling levels of letter traffic.
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