AN EXTRA TREASURY BENEFIT OF ROYAL MAIL PRIVATISATION

[TrueBlueTerrier]

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Mandelson's determination to privatise part of the Royal Mail.

In the letters page of the Dundee Courier, a letter from David McNicoll of the Carnousie Golf Shop caught my eye. I'm sure he won't mind me quoting it.

Sir,—Many members of the public may not be aware Royal Mail services are exempt from VAT.

If the part privatisation goes ahead the company which owns it will be subject to the tax and therefore Mr Brown’s government will receive a substantial income on the turnover.

Is this the real reason why the government wants support for the proposal? I have not yet heard this mentioned from any commentators.

Obviously there is only one person who pays the VAT at the end of the day and that’s the end-user . . . you. Stand by for a 15% hike in postal costs.'

I never realised VAT would have to be paid by the purchaser, did you? So the government get the best of both worlds with this sell off, they receive the purchase price then quarterly VAT contributions. No mention has been made about the price the purchaser will pay but somehow they must think it's cheap or they wouldn't be touching it with a barge pole. There's more to this than meets the eye and it's not only the fact that labour have broken a manifesto commitment in which they assured the electorate the Royal Mail would be kept in public ownership, but a pledge they made last year to the unions.

[DGP1]

The VAT is peanuts compared to our pension fund

[POSTMAN]

Look at it this way,pre liberalisation and all that no VAT,po liberalisation VAT on the DSA dudes,so extra money there,then VAT on everything as Royal Mail will have to pay as well as the others an agreed amount so everyone is paying the same rate.
This will be less than 15%.But then the tax man gets loads more.

So then who's gonna pay for the extra?Price rises?Job cuts?