Some organisations aren’t allowed to claim back VAT on operating costs like bulk postage and this applies to those with charitable status. If that includes your organisation and you also use an Unsorted or Sorted Mail services, then we can still help you make savings by setting up an agency agreement contract.

Downstream Access (DSA) providers have an agency agreement with Royal Mail that allows customers to retain VAT exemption for almost all of the transactions. Under the agreement, the DSA provider can act as the charity’s agent and secure Royal Mail final mile delivery services on the charity’s behalf (by taking the mail to regional hubs) this is also known as a tri-party agreement because the agreement is between Royal Mail, DSA and the Charity.

The tri-party postal agency agreement allows you to only pay VAT on the upstream element (collection and sorting by the DSA) with no VAT charged on the ‘downstream’ element (the final mile delivery by Royal Mail). The downstream element is where most of the cost lies hence why the bulk of the costs are subject to NO VAT. The postal invoice will be issued by the DSA provider which will include Royal Mail’s costs. So, as a charity you can enjoy direct, lower pricing on your bulk mailing.

If you don’t have an agency agreement yet – or you do, but want us to review your postage costs, please get in touch. We have helped multiple charities open agency agreements over the past 7 years and helped many more reduce their postal costs by reviewing their rate card, or by using our ISO27001 data bureau to clean their data to achieve Sustainable Mail Intermediate level discounts.

We will soon be rolling out our exciting new Climate Neutral Mail service which works in collaboration with a new or existing agency agreement to reduce your postage costs. This service which will be officially launched soon helps make your direct mail eco-friendly and goes some way to supporting your own Corporate Social Responsibility (CSR) pledge.

For more information on Charity Tax issues, a helpful link is the Charity Tax Group: https://www.charitytaxgroup.org.uk/

We work proactively with Bates Wells and Braithwaite to ensure we stay compliant with the most up to date regulations, aware of best practices, upcoming regulation changes and documentation requirements.