I am doing a P & L forecast for an online co. They are VAT reg and will charge extra for postage. The income from postage will be included in income and the cost of postage in the expenses.
I realise there is no VAT re claimable on postage but what about VAT on the postage income, do I seperate the income and put as outside the scope for sales tax or will they have to pay VAT on this as income?
My understanding is that if you are selling standard rated items then the postage you charge is also standard rated. Only postal services from the Post Office are exempt from VAT.
