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VAT in the UK drops to 15%
Published by Ricky Chotai on Tuesday 25th November 2008, 00:55 Comments | Filed under: Operators, T-Mobile

This post is more of a question then an actual post. Those of you based in the UK will know that VAT is being lowered to 15% and your mobile service includes VAT.

Will the networks be recaulating bills in regards to the drop automatically from the 1st of December? I certaintly will be contacting by network operator (T-Mobile) to ensure that the changes are reflected in my bill.

I know the savings will only be a few pence however in these hard times every penny is essential!

Have the networks planned for the situation?  We shall be finding out soon!

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  • TrevorBennett
    Good thought provoking post Ricky.

    I'm hoping three will recalculate my bills down to the new 15% rate of VAT, however I believe that they will increase the price plan to give the same overall amount. Can't really see the networks breaking away from their nicely rounded £15 / £20 £25 etc... per month figures.

    I hope to be suprised, but am not holding my breath.

    Trevor.
  • i sense the same Trevor, however all we can do is wait.
  • Well if any business, mobile or not simply ups his price by 2.5% to give the same end price to the consumer then that is a pretty poor showing.

    It's like being given £5 to spend on sweets but to be shared between you and your brothers...but keeping it all and telling your brothers to go look after themselves.
  • Mike42
    I disagree. Changing the price point by a few pence will just confuse the hell out of consumers, for sod all gain - on a £30 / month tariff, you are talking the pre-VAT amount of £25.53 + 15% VAT ( £3.83) = £29.36!

    64p per month saved. woo hoo.

    Can you imagine all the highstreet shops, newspapers, magazines with banner ads of "Only £29.36 / month on T-Mobile!"

    Do you really want to do this for what is only a temporary drop in VAT?

    I imagine many businesses meeting rounded, easily-digested price points will not shift either. There's a reason why they used easily-understood pricepoints.
  • Mike42
    Common sense prevails: "Pay Monthly price plans: We'll make sure the VAT reduction is applied to your monthly bills and to all the things you buy that are outside of your inclusive allowance. Our price plans will be advertised in the same way (i.e. Mix & Match 300 at £15) but you'll always pay less. "

    So the headlines remain the same, but the amount charge on the bill reduces. Fair 'nuff.

    ....but I can imagine this may confuse the hell out of many expense claims, depending on how it's enacted: "So, Jenkins, you were billed £30 but only paid £29.36. Where's your receipt for £29.36 eh?"

    "Er...dunno boss...here's my bank statement if it helps"

    /m
  • If any operator does that they'd find all their customers (or me, at least) cancelling their contracts early as it's a change to the price advertised when they signed up ;)
  • I'm assuming they will do
  • oops, apologies for that. I've turned Disqus email alerts off so shouldn't get the auto-replies now!
  • TrevorBennett
    As you would expect, 3 are the first to move on this VAT reduction - comprehensive details here http://www.three.co.uk/personal/help_support_/b...

    Good strategy on pre payment top ups too I thought.

    Cheers for now,

    Trevor.
  • yes it as a good thing especially the prepay one
  • Kass
    Ah one problem i can foresee.

    With VAT changing down to 15% that means that business are going to have to pay to change there accounting systems. now as this is only a temporary cut untill the end of 2009 i belive. When it comes to increasing that extra 2.5% again Business will need to restore back to the origonal VAT leval systems.

    I total this could cost a significant amount which would be subjected onto us anyway. its going to be intresting to see which of the companys dont push this cost onto there consumers.

    I think that we will have to just wait and see really.
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