Promotion fee on postage cost

[trade-price-stamps-2015]

Am i correct in saying that we seem to pay a promotion fee on postage

So Example;

Item sale price is £7.40

postage                   £1.00

promotion

Campaign               5%

So 5% of £8.40 is £0.42 and then Vat 20% making it £0.50 fee

Seems nuts, should be 5% on just the item sale price as this is what is being promoted surely.

Hope somebody tells me i am Wrong or tells me why.