Stamps could cost £1 if newly privatised Royal Mail loses VAT-free status in court

First-class stamps could soar to £1 if newly privatised Royal Mail loses a vital court case, the Sunday People reports.

Campaigners fear the unpopular sell-off leaves it vulnerable to losing its VAT-free status next month in a High Court battle with TNT Post.

If its rival wins, Royal Mail could immediately be forced to add 20 per cent to its stamps.

This would send a first-class stamp from 60p to 72p, and a second class stamp from 50p to 60p. Experts also predict a 30 per cent rise on top – driving prices up to the £1 mark.

Martyn Forsyth – a campaigner who argued against the Royal Mail sale – said: “Such a price increase would hit vulnerable people hard, particularly the elderly and those in rural communities.

“A recent survey showed half the elderly people who use Royal Mail would have to reconsider sending Christmas cards. That’s tragic.”

He added: “A £1 letter is also going to be tough for small businesses. They’ve already been hit with parcels going up 50 per cent.”

Ned Corbett-Winder, who runs online surprise gift company notanotherbill.com says the sell-off could end up costing small businesses like his thousands a year.

He said: “Like many companies, I rely on the Royal Mail for my business. Considering there’s been much talk about supporting entrepreneurs and small firms, this could be a slap in the face.

“It costs my company an average of £2.25 to send a package. If that went up 20 per cent it would cost £500 a month.

“The Government should think about enforcing a price cap on first and second-class stamps, otherwise we’re likely to see a succession of price hikes.”

Dutch postal giant TNT took Royal Mail to the European Court in 2009 claiming its VAT exemption on stamps was unfair.

But Royal Mail stayed exempt as it was a “public service” for all.

However, TNT takes up the fight again in the High Court on November 26. It is expected to argue Royal Mail should now be subject to the same rules as others.

The sell-off has been bitterly criticised with fears of job losses and a down-graded service.

Last year Royal Mail boss Moya Greene received nearly £1.5million in pay and perks, around 72 times the pay of a postal worker.

Via Stamps could cost £1 if newly privatised Royal Mail loses VAT-free status in court next month – Mirror Online.

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