Early termination fee - VAT or no VAT?

[Anonymous]

Hi people,

I've had different answers on chat, over the phone and in store. If I end my O2 contract early, will I be charged VAT on the remaining months? I am not disputing anything, I am simply checking what the case is with O2, as I'm getting conflicting information.

I did it with another network a number of years ago and VAT was excluded, but I know networks will operate differently.

Anyone know for sure?

Many thanks

[MI5]

If it's a standard contract it's your basic monthly rate multiplied by the number of months, so yes, vat is included in the costs.

[Cleoriff]

@AnonymousIf you are on a personal contract you will be charged the amount of months outstanding which are vat inclusive I believe. Business contracts are different https://community.o2.co.uk/t5/How-to-Guides/Cancelling-Your-Contract-A-Guide/ba-p/566774#M56526

[darrengf]

Oh hang on.  If I remember you can’t be charged VAT on a product you haven’t used.

i believe no network can charge you, I may be wrong, but I would check with O2 retention team for final price. 

[MI5]

It's a discussion we've had previously on here.

[darrengf]

This is a 2016 Article.

https://kenstechtips.com/index.php/cancelling-your-mobile-phone-contract-early-termination-fees-alte...

It it shows all the network termination fees and every network is different. 

From reading it. O2 are one of the networks that charge the full amount. 

Good to to read for other networks.  Also bare in mind it’s fro. 2016 so you agreement may be a little different. 

[Martin-O2]

Hey @Anonymous I'll double check what the VAT situation is when cancelling early! 

[Anonymous · Accepted solution]

Hi everyone,

Just updating this thread in case it helps other customers in future - I obtained my PAC and used it, my final bill has arrived and it does not include VAT on the remaining months.

Many thanks

[MI5]

I'm glad they've changed that then as we've always said it was wrong.

[jonsie]

I don't know how they got away with it for so long. My understanding, having worked in and ownng a VAT registered business, my understanding is that you cannot charge VAT on a service not supplied. This point was strictly adhered to at one time, hence you would pay less for or more for cold or hot food. Retailers seem to have long since 'forgotten' this legal obligation.