VTAXPER44000 | Issues to consider: identifying disbursements in particular areas and trades: Freepost

Companies may employ agents to process replies to advertising campaigns; typically this will involve reply paid coupons appearing as flyers in the press. The agent will buy a Freepost licence and possibly PO box numbers from the Post Office. The Post Office then charge the postage and, depending on the contract, a handling fee in direct proportion to the number of replies received.

Unless the Freepost and PO boxes are set up in the name of the client company for exclusive use by that company, the supply of the licences will be to the agent and cannot be disbursed. The supply of the postage is to the sender of the mailing and is not a supply to either the agent or the company; they are simply paying the cost.

The supply of handling the mail is a direct consequence of the Freepost arrangement and is an additional cost component of it. This supply will follow the treatment of the Freepost licence itself.