Royal Mail Compensation Payments and VAT

[acompton]

I have just received my first Royal Mail compensation cheque for the one lost parcel over Christmas. I'm trying to put it into the company accounts. How do I account for VAT? Is there any VAT element to it? (no goods or services are involved).

Alan Compton
www.greenknightgames.co.uk

[oldhasbeen]

Hi Alan - payments to and from RM are VAT exempt.

If you are VAT registered you have to charge VAT on the p&p element to your customer as you are providing this as a VATable service.

If you are using a courier (not Parcel Force as they are also VAT exempt), you will pay VAT on their invoices and can offset. With refunds from a courier you'll also get a VAT split.

You can tell I've been down this road before

[acompton]

Helen,

Thanks for replying. As no one had replied, I asked my accountant who said that the the compensation payment counts as an insurance payout and has no VAT element.

(Keep awake in the back row there )

Alan

[los_design]

Helen,

Thanks for replying. As no one had replied, I asked my accountant who said that the the compensation payment counts as an insurance payout and has no VAT element.

(Keep awake in the back row there )

Alan

Info read and grabbed for future reference.

Free info from an accountant is like gold dust around these parts

Regards

[acompton]

Free info from an accountant

I find the end-of-year bill contains suspicious items like "Consideration and advice on VAT and Postage"

Alan

[Duncan Rounding]

I find the end-of-year bill contains suspicious items like "Consideration and advice on VAT and Postage"

Alan

...with VAT charged on the consideration