UK profit on postage

[maria]

Hi
I need some clarification on an issue regarding profit on postage, 3 month returns.

Item cost £100
Postage £20

I want to know if we have to pay VAT on overall payment from customer including the postage £120?
or
product price £100?

Is Postage classed as seperate as we have made no profit on this?
The customer has paid for the postage.

Looking forward for any help

 

[Truemanbrown]

Postage services provided by the post office are exempt from VAT. However, if any delivery charge you make to your own customers includes the cost of stamps you buy from the Post Office you may have to charge VAT on the whole amount including the cost of those stamps.

In that scenario, you would charge VAT on £120.

You can find more info here.