Postage charges in taxable supply: delivery arranged by trader, not disbursement, so VAT was payable on the amount collected.

The postage element collected from the customer formed part of the trader's consideration for its taxable supply because the trader undertook to arrange delivery, not merely to pay a third party on the customer's behalf. Parcelforce supplied the carriage service under a separate contract with the trader, and the customer had no direct liability to Parcelforce. The disbursement conditions under the Sixth Directive were not met, so the postage charge remained part of the trader's receipts. VAT was therefore payable on that amount and it was includible in taxable turnover.

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Issues: Whether the postage element collected by the trader from its customer formed part of the consideration for the trader's taxable supply, or whether it was an amount paid out on the customer's behalf and therefore outside the trader's taxable amount.

Analysis: The contractual documents showed that the trader undertook to arrange delivery of the goods, not to make the actual delivery itself. The actual carriage service was supplied by Parcelforce under a separate contract with the trader, and the customer had no direct contractual liability to Parcelforce. The amount collected for postage was therefore part of the trader's receipts and not a sum paid out in the name and for the account of the customer. The conditions for exclusion as a disbursement were not satisfied under the Sixth Directive. The trader's own supply was the arranged delivery service, while the postal delivery itself remained a separate supply.

Conclusion: The postage charge was includible in the trader's taxable turnover, and VAT was payable on that amount.

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