VAT trap questioned
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/ Clarification is being demanded from the Government as to whether the owner of a privatised Parcelforce will have to charge VAT on its parcel delivery prices.
Labour MP Peter HaM is asking for a statement from Board of Trade president Michael Heseltine on whether the 17.5% charge will be imposed, and if so, what its impact will be on Parcelforce's customers. goods and services purchased if it was VAT-registered.
Whether Parcelforce continues to operate without VAT after privatisation and retains its allowance for more flexible drivers' hours are currently being discussed by the Department of Trade and Industry and the Post Office.
Prospects for the sale of lossmaking Parcelforce are poor and there is so far no clear timetable for its conclusion.