What Are SMART franking machines?

What Are SMART franking machines?

SMART franking machines help you split out which items require VAT to be paid and which don’t. Changing EU rules mean that as of 2011 the following postal products are no longer exempt from VAT:


  • Special Delivery Guaranteed by 9am™ (stamps, franking and account)
  • Special Delivery Guaranteed by 1pm™ (account)
  • Royal Mail Tracked 24 and Royal Mail Tracked 48
  • Royal Mail Sameday®
  • Royal Mail 1st and 2nd Class Account Mail (formerly Packets)
  • Royal Mail Signed For™ will also become liable to VAT if purchased as an add-on to a standard rated service. In all other circumstances it will remain VAT exempt.

International (VAT will only be added to EU destinations)

  • International Contract Tracked and Secure Services (Contract Airsure® and Contract Signed For)
  • International Contract Services (Mixed Mail, Letters, Flats, Packets, Destination Sort and Mbags)
  • Airsure®
  • International Admail and Admail Packets
  • International Redirections

Other Products

  • Business Mail Secure
  • Admail
  • Callers Services
  • Posting Cheque administration charge
  • Private Posting Box
  • Royal Mail administration fee for collection of HMRC charges
  • Royal Mail Pouch Services
  • Rural Newspaper Delivery
  • Rural Carriage of Goods
  • Redirect Diversion
  • Ministerial Pouch services
  • Do not redirect
  • Safebox

The Royal Mail website has a complete list of products where VAT is applied.

Products That Remain Exempt From VAT:


  • 1st and 2nd Class (stamps, online, franking, account*)
  • Special Delivery™ Next Day (stamps and franking)
  • Standard Parcels
  • Recorded Signed For™ (if purchased with a VAT exempt service)
  • Keepsafe™ (personal and business)

*1st and 2nd class account is a new product that was launched in April 2012. This is a Universal Service which does not qualify for volume related discounts. Royal Mail also offers a 1st and 2nd class service called Business Mail which is available on account. Volume related discounts are available on this service for larger postings and VAT is liable


  • Airmail
  • Surface Mail
  • International Signed For
  • All HM Forces Mail (BFPO)


Well you should be. The list above makes most people’s head spin. There are so many options to choose from that paying the wrong amount of VAT could easily happen. However, not with a SMART franking machine!

SMART Franking machines have a complete list of exempt and non-exempt items in their memory. All you have to do is record what kind of postage product you’re sending and your franking machine will do the rest. It will keep a record of how much VAT you’ve paid, so you can reclaim the correct amount from HMRC.

Each franking machine company has come up with it’s own solution to make their franking machines SMART.

Click Here To Speak With A Franking Machine Expert!

Pitney Bowes

All of their new machines are SMART enabled from the get go. They also have a websites that lets you log-on and monitor your postage spend for one or multiple machines. Older machines should have already been upgraded via download.


All IS range franking machines are already SMART enabled, which means all new machines currently being offered. For older non-IS models, please get in contact with your rental or servicing company to see how you can track your VAT payments.


Like both Neopost and Pitney Bowes, new Frama machines are fully VAT compatible. The FramaOnline2 data centre will keep your machine up-to-date on the latest changes. Older machines can be upgraded for £45 (plus VAT of course)


New FP franking machines are also now ready to handle VAT through FP’s website, which can also help you track your postage spend. Again older machines can be upgraded if desired.


If you’re buying or renting a new machine you don’t need to worry about whether or not it’s SMART enabled as it will be (you can of course ask to be sure). If you’re buying or still renting an older machine that it may or may not be SMART enabled.

In this case make sure you ask your company how you can upgrade if you want to benefit from automatic VAT calculations.

Click Here To Compare Prices For New Machines!

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