From the Copy of Economic and Fiscal Strategy Report and Financial Statement and Budget Report – June 2010 as laid before the House of Commons by the Chancellor of the Exchequer when opening the Budget - which can be viewed here.
On page 59 we read: "2.159 From 31 January 2011, VAT will be applied at the standard rate to certain postal services provided by the Universal Service Provider (Royal Mail), restricting the exemption to those services which Royal Mail is obliged to provide."
Why is VAT to be applied at the standard rate to certain postal services provided by Royal Mail - services which presently are not subject to that tax? To learn the true reason one has to look at the Royal Mail website, from which I quote: "As part of the budget on Wednesday 24th March 2010, the Government announced plans to introduce VAT on some of Royal Mail’s products and services from Monday 31st January 2011. The Government confirmed this in the Budget on 22nd June 2010. This follows a legal challenge to the VAT exempt status of our services and a ruling by the European Court of Justice on the services that can remain VAT exempt." (my emphasis)
Once again this apology for a government has been 'economical with the actualite' when announcing the imposition of VAT in a new area. And our politicians still believe they 'govern' us?