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VAT increase

Anonymous
Not applicable
Does anyone know how o2 are going to handle the VAT increase that will take effect shortly?
Is the ten pounds a month Simplicity tariff still going to cost ten pounds to new or upgrading customers, for example, with o2 swallowing the difference, or have they got other plans?
In other words, is it worth upgrading now or in the new year?
Message 1 of 23
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22 REPLIES 22

Anonymous
Not applicable
It's worth noting O2 were good enough to pass the savings onto us when the UK lowered the VAT rate to 15% a while ago.
Now VAT is rising to 20% the charges will be passed onto us as well.
Message 11 of 23
389 Views

Anonymous
Not applicable
Basically most companies and products will keep the pricing setup, since its been in use for hundreds of years pretty much ie £2999. £19.99.
All that will happen is they will round it up more and we will end up paying another £10 or £5 for things so they can make even more.
Message 12 of 23
389 Views

Anonymous
Not applicable
It's worth noting O2 were good enough to pass the savings onto us when the UK lowered the VAT rate to 15% a while ago.
Now VAT is rising to 20% the charges will be passed onto us as well.

Would have been illegal to charge a different VAT rate. So they were good enough to follow the law and not be committing fraud. Well done o2. Good job. If they have put prices up slightly that would have been a disaster PR and media wise, so actually all they did was the sensible business decision.
It's absolutely nothing to do with honour like you make out slight_smile
Message 13 of 23
389 Views

Anonymous
Not applicable
o2 say inc vat if vat changes that is not o2's fault.
8.4 You may end this Agreement by giving us written notice if:
(a) we break this Agreement in any material way and we do not correct the situation within 7
days of receipt of your written request;
(b) we go into liquidation or a Receiver is appointed over our assets; or
(c) you are a Consumer Customer and we increase charges by more than 10% for calls,
messages or data that form part of your inclusive allowance or your Line Rental Charges or
change this Agreement to your significant disadvantage in accordance with paragraph 9.2 of
the General Terms, provided you give us a minimum of 30 days’ written notice (and provided
you notify us within one month of our telling you about the changes). This does not apply
where:
(i) the increase or change relates solely to Additional Services in which case you may cancel,
or stop using, that Additional Service;
(ii) the increase does not exceed any relevant indices, including but not limited to the Retail
Price Index (“RPI”) or the Consumer Price Index (“CPI”) figure in any twelve month period; or
(iii) the increase or change is as a result of a requirement by a government or competent
regulatory body. For the avoidance of doubt this shall include any increase in VAT or the
imposition of a similar or new tax on the Service or us
.

Source http://www.o2.co.uk/assets2/pdf/AIRTIME ... _OCT10.pdf

Is it not absolutely obvious it will be in the small print? So what if it is? Have you ever read the small print when you fully buy an electronical device? Some of them actually say you are renting it from them. Yes even when you have fully paid. So you rent your TV from sony. Its small print, its ####.
Message 14 of 23
389 Views

Anonymous
Not applicable
Hmmmm, you point out that it would be illegal for o2 NOT to give the vat rebate last year as it would constitute fraud, but expect them to defraud the exchequer by Not levying the correct vat when it goes up. Interesting viewpoint you have there. And sounding not at all ridiculous or contrary, either. Well done. grin
Message 15 of 23
389 Views

Anonymous
Not applicable
http://www.hm-treasury.gov.uk/contact_index.htm
There you go... Feel free to tell Mr Osbourne all about your woes as I doubt O2 will take much notice of your poorly constructed argument.
VAT is going up to 20% on Tuesday, 04th January 2011 and that's the way the cookie crumbles!
Message 16 of 23
389 Views

Anonymous
Not applicable
It's worth noting O2 were good enough to pass the savings onto us when the UK lowered the VAT rate to 15% a while ago.
Now VAT is rising to 20% the charges will be passed onto us as well.

Would have been illegal to charge a different VAT rate. So they were good enough to follow the law and not be committing fraud. Well done o2.

Erm, no.
At 17.5% VAT, a £30 per month contract is £25.53 + VAT
When the VAT fell to 15%, O2 could have changed the price of a £30 per month contract to £26.09 + VAT.
Under tax law that would have been fine - but you would no doubt have had some people trying to exit their contract due to the change in underlying price.
Message 17 of 23
389 Views

Anonymous
Not applicable
Not sure where that figure of £26.09 has been plucked from
The cost of a £30 tariff is £25.53 + VAT
so when it was reduced to 15% the cost of contract was adjusted accordingly to £29.36
it was advertised at this price and also adjusted for existing customers
the same will be done when it changes in January
Message 18 of 23
389 Views

Anonymous
Not applicable
Markie clearly said where he got the figure from. It's the amount o2 would have had to charge for the £30 tariff IF they had tried to maintain a round price of £30 when vat dropped to 15%. the point being that they didn't do that.
Message 19 of 23
389 Views

Anonymous
Not applicable
On a £30.00 tariff O2 charge the customer £25.53 because that is what O2 takes from you when you pay your bill.
The rest of your bill is VAT.
If you're not sure why you have to pay VAT then please refer to the Directgov website.
http://www.direct.gov.uk/en/MoneyTaxAnd ... /DG_190918
So the math behind it all...
| 25.53 x 1.175 = 30
At 15% it's...
| 25.53 x 1.15 = 29.36
And at the new rate of 20% it's...
| 25.53 x 1.2 = £30.67

The same calculation would apply to all current tariff's that O2 offer by chaging the first figure of the sum accordingly.
Message 20 of 23
389 Views