profit on postage stamps

[mizzam]

are newsagents,supermarkets allowed to make a profit on stamps,ie a mark up

[kempie]

Definitely not.

Retailers are bound by a set of Terms & Conditions when they sell any Royal Mail products, one of which being that they are not permitted to charge more than the face value of a postage stamp.

The Royal Mail will take very seriously any reports of retailers who overcharge for stamps (ie for more than their face value).

[mizzam]

thanks very much my local shop charging 36p for 1st class stamp

[Buenchico]

Kempie, is of course, correct.

This question has been asked before. The definitive quote from Royal mail, together with the address to which you can send your complaint, is in the final post, here:
http://www.theanswerbank.co.uk/Shopping/Questi on188598.html

Chris

[dzug]

Hmm I'm still not convinced that the newsagent is necessarily doing wrong.

If he bought the stamps from the Royal Mail under contract, then yes, at least potentially. Maybe the legality of such a contract needs testing though. Resale Price Maintenance is generally illegal in the UK and has been for 40+ years. I don't see why the Royal Mail should be exempt from the law.

If he bought them from a Post Office or another retailer for cash, I can't see that he's bound by any Royal Mail T&C - he's not contracted to them in any way. I think he could argue that he's charging his customers a service fee for obtaining them stamps at cost.

[kempie]

...provided the retailer pays VAT on the resale.

The sale of valid, unused postage stamps at (or below) their face value incurs no VAT liability; however if sold at a cost above the face value the retailer must account for VAT on the amount exceeding the face value.

http://customs.hmrc.gov.uk/channelsPortalWebAp p/channelsPortalWebApp.portal?_nfpb=true&_page Label=pageVAT_ShowContent&id=HMCE_CL_000855&pr opertyType=document#P31_1621

Retailers who buy postage stamps direct from the Royal Mail have no VAT liability and receive a 5% discount on the purchase price.

[dzug]

I can hardly see the Inland Revenue getting too worked up over a few pence a week in VAT in this sort of case. Small shopkeepers are probably on a simplified VAT accounting regime anyway.

[kempie]

Does not the simplified VAT regime mean that a retailer reselling a first class stamp at 36p pays 17.5% on the full amount of the payment he receives for that stamp (i.e. ~6p), thus making a loss on each overpriced stamp sold?