In September 2009, the Appellant made a claim for input tax it claimed it had incurred on postage totalling £383,599, which HMRC rejected in 2010.
The Appellant carried on a mail order business and used the services of Royal Mail to despatch its orders and also to distribute advertisements. It was accepted that at the time the Royal Mail made those supplies to they were considered to be exempt from VAT.
The appellant’s claim was made on the basis that Royal Mail had wrongly treated its supplies as exempt when the services were in law standard rated following the ECJ’s decision in TNT as they were ‘individually negotiated”.
HMRC agreed that the Royal Mail’s ‘Mailmedia’ supplies were standard rated as a matter of EU law. It was agreed by the parties that Royal Mail had treated the supplies of ‘Mailmedia’ as exempt. It did not account for VAT
