VAT on Postage and Delivery Charges in the UK

By VAT Calculatorz · Last updated 8 October 2026

Definition: A delivery or postage charge is not taxed on its own in most retail sales. When a seller must deliver goods to the customer under the contract of sale, the goods and the delivery form a single supply of delivered goods, and the VAT rate on the whole amount — goods plus delivery — is the VAT rate of the goods themselves (HMRC VAT Notice 700/24, section 2.2).

Quick answer: Yes, you normally charge VAT on postage and delivery — but at the same rate as the goods you are sending. Deliver standard-rated (20%) goods and the delivery charge is also 20%. Deliver zero-rated goods (most food, books, children's clothes) and the delivery charge is 0% too. It makes no difference whether delivery is charged separately on the invoice or built into the price.

Check any goods-plus-delivery total with our free VAT calculator — add the delivery charge to the price, choose the rate of the goods, and it shows the VAT split.

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The Rules in One Table

Situation	VAT on the delivery charge
Delivery is part of the sale (contract requires delivery, or free delivery built into the price)	Follows the goods: 20% goods → 20%, 5% goods → 5%, 0% goods → 0%
Mixed basket of standard-rated and zero-rated goods	Split the delivery charge in the same proportion as the goods (a fair and reasonable apportionment)
Delivery is NOT part of the contract — an optional, separate delivery service, or delivering someone else's goods	A separate supply of services: standard-rated at 20% in the UK, whatever the goods are
Goods sent on approval, with a charge for delivering them for viewing	A separate delivery service: standard-rated at 20%
A separate charge purely for packing someone's goods	Standard-rated at 20% in the UK

Step by Step

Look at the goods first. Find the VAT rate of what you are sending — most goods are 20%, some are 5%, and items like most food, books and children's clothing are 0%.
Ask whether delivery is part of the sale. If the customer is buying delivered goods (the normal online-shop and mail-order case), the delivery charge takes the same rate as the goods.
Add the delivery charge to the goods total and work out VAT on the combined amount at that rate — our VAT calculator does this in one step.
For a mixed basket, split the delivery charge between the rates in proportion to the value of the goods at each rate, and apply each rate to its share.
Only if delivery is a genuinely separate service (not required by the contract, or you are delivering goods you did not sell) charge 20% on the delivery itself.

Worked Examples

Example 1 — Standard-rated goods, separate delivery line

You sell a kitchen gadget for £50.00 plus £4.99 delivery. The goods are standard-rated, so the delivery is too.

Amount before VAT: £50.00 + £4.99 = £54.99
VAT at 20%: £54.99 × 20% = £11.00 (rounded)
Customer pays: £54.99 + £11.00 = £65.99

It does not matter that the £4.99 appears on its own invoice line — because delivery is part of the contract, it is one supply of delivered goods (Notice 700/24).

Example 2 — Zero-rated goods: no VAT on the delivery either

You sell children's clothes for £30.00 plus £3.99 delivery. Children's clothes are zero-rated.

VAT on goods: £0
VAT on delivery: £0 — the charge follows the goods
Customer pays: £33.99, with no VAT anywhere on the invoice

Example 3 — A mixed basket

An order contains £80 of standard-rated goods and £20 of zero-rated goods, with a single £5.00 delivery charge.

Split the delivery 80:20 → £4.00 follows the standard-rated goods, £1.00 follows the zero-rated goods
VAT: £4.00 × 20% = £0.80; £1.00 × 0% = £0
Total VAT on the delivery charge: £0.80 (plus the VAT on the goods themselves)

Example 4 — A separate delivery service

A customer buys zero-rated goods on terms that do not include delivery, then asks you to arrange delivery as an extra, for £6.00.

This is a separate supply of a delivery service, standard-rated in the UK
VAT: £6.00 × 20% = £1.20 — even though the goods themselves were zero-rated

The Stamp Trap — the Common Mistake to Avoid

Stamps and Royal Mail's postal services are exempt from VAT, and this causes endless confusion.

What Royal Mail charges you does not decide what you charge your customer.
If you pass the postage cost on to your customer as part of selling delivered goods, your charge is not exempt — it follows the VAT rate of the goods, even if your charge is exactly the price of the stamps.
So "I only charged what the Post Office charged me" is not a reason to leave VAT off. Check the goods, not the stamps.

When This Does Not Apply

You are not VAT-registered: you do not charge VAT on anything, postage included — but you also cannot reclaim VAT on your costs. See our guide to the VAT registration threshold.
Goods delivered to customers outside the UK: exports are usually zero-rated with the right evidence, and delivery that is part of an export follows the goods — the rules have extra conditions, so check HMRC's export guidance before relying on this.
You are only recharging a cost as an agent (a true disbursement): narrow conditions apply and this is different from simply passing on your own postage cost — take advice before treating a recharge as outside the scope of VAT.

Sources and References

This guide is general information, not tax advice. If your delivery arrangements are unusual — for example international deliveries or agency recharges — check with HMRC or a qualified accountant.

FAQs

Do I charge VAT on postage to my customers?

Usually yes — at the same VAT rate as the goods, because the postage is part of a single supply of delivered goods. If the goods are zero-rated, the postage charge is zero-rated too.

Is postage exempt from VAT because stamps are exempt?

No. Stamps and Royal Mail's own postal services are exempt, but a seller's charge to a customer for delivering goods is not the same supply. It follows the VAT rate of the goods being delivered.

What VAT do I charge on delivery for a mixed order?

Split the delivery charge between the standard-rated and zero-rated goods in proportion to their values, and apply each rate to its share — HMRC calls this a fair and reasonable apportionment.

Does it help to show delivery as a separate line on the invoice?

No. Whether the delivery charge is itemised or built into the price does not change its VAT treatment; what matters is whether delivery is part of the contract of sale.

What if I offer free delivery?

Then there is no separate charge to tax: VAT is worked out on the full selling price of the goods at their normal rate, exactly as if the delivery cost were included in the price.

Work out the VAT on any amount in seconds with our free UK VAT calculator.