Mind you, what gets me is the VAT 'fiddle' (or reverse-fiddle, since it's the government doing the fiddling) that the treasury pulled on the Post Office & Royal Mail (RM). Basically, because stamps are
exempt from VAT - which is not the same thing as zero-rated (such as books, food, etc...)*. This means that RM can't claim back the VAT that it incurs, whereas those companies that produce zero-rated goods and services can. This is a problem since whoever runs the train is required to charge VAT on all aspects of its service, including wages (on top of payroll taxes and everything else) - see
VAT Notice 744B whereas most other businesses could register for VAT and claim it back.
* see
http://www.hmrc.gov.uk/vat/forms-rates/rates/goods-services.htm - even train fares are zero-rated, so TOCs can claim back their input VAT.