No imminent Vat reductions from TalkTalk or Sky
The Vat reduction was passed on by most major ISPs at the end of last year with the notable exceptions of TalkTalk and Sky, and it looks likely to stay that way for the time being.
TalkTalk initially told SamKnows it had not immediately passed on the reduction because it was working on increasing its £4 boost packages to add more than 2.5% extra value. However, after spending December evaluating how this could be done, the ISP has now decided not to increase the provision of its speed or security boosts for its broadband subscribers and is instead offering a Vat credit scheme. Broadband subscribers, who were with TalkTalk before last December, can look up how to apply for the credit at www.talktalk.co.uk/vat.
The ISP is not being drawn on the value of the credit or how the one-off payment will be redeemable in April but it is promising subscribers it will be worth more than the equivalent of the 2.5% reduction in Vat.
A hint was dropped to SamKnows in December that TalkTalk was back-tracking on its announcement it would add to its boost packages when a spokesman revealed, contrary to the then official corporate line, that some executives within the ISP already believed the £4 boost packages were already good enough value and did not need improving. It would appear that this argument has won the day and the ISP now has until April to decide the finer detail of what its Vat credit scheme will be.
There is a surprising reason behind why Sky customers will not be seeing a small reduction in their monthly tariff to reflect the Chancellor’s small Vat decrease. A spokesperson for the ISP explained that the reduction would not be passed on because the service is officially provided from Luxembourg and so is not subject to UK Vat.
The spokesman denied any suggestion this could appear to be a curious means of reducing the company’s tax liability given that it provides UK broadband users with a service from exchanges in the UK.
According to the spokesman the company has an office in Luxembourg and so can legitimately claim the Sky broadband service is provided from the small, tax haven.
Tags: Broadband Pricing, Sky, TalkTalk, VAT
January 7th, 2009 at 4:44 am
Well last time i checked, i paid VAT on my sky bill…
January 7th, 2009 at 2:46 pm
Orange also “provide” their broadband service financially and contractually from Madeira, something inherited from Freeserve. Orange haven’t reduced prices but say they are thinking about it on their web site.
Demon appear to have maintained their VAT inclusive retail prices for existing customers, but the website offers lower rates for new customers.
January 7th, 2009 at 5:12 pm
Orange has reduced its prices for Broadband and Mobile. It has a small percentage of BB (none mobile) customers billed via Madeira but this is in process of coming back to the UK.
January 7th, 2009 at 7:37 pm
time for Orange to update their website then “IMPORTANT: Reduction in VAT
We are planning on passing on the new VAT reduction to customers but are just working through how and when this will happen. We’ll let you know as soon as possible.”
““Orange Broadband” means OHCS II – Serviços de internet Unipessoal LDA, a company registered in Madeira (company number 07529/05/08.22) whose registered office is located at Rua de São Francisco No. 3, 2 Andar, Fracçao E, 9000-050 Funchal, Madeira, Portugal”
January 9th, 2009 at 1:20 pm
Could you post the link for that update please?
January 13th, 2009 at 11:32 am
the “We are planning” bit is at http://www.orange.co.uk/time/broadbandaccess/
the Madeira address is in the T&Cs at http://www.orange.co.uk/terms/5506.htm near the bottom
January 14th, 2009 at 11:35 am
Sky users do pay VAT on their bills but the broadband and Sky Talk portion of that bill is not subject to UK Vat rates