MSE News: Vodafone to issue mass refunds after billing blunder

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This is the discussion thread for the following MSE News Story:
"The mobile giant overcharged tens of thousands of mobile customers by wrongly adding VAT to non-EU use ..."
"The mobile giant overcharged tens of thousands of mobile customers by wrongly adding VAT to non-EU use ..."
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:eek: :eek: :eek:
If that is true, I think those users could do with some serious money saving advice.
I didn't even pay £1000 in total for my annual holiday this year!
:huh:
But to assume (a) that they all used their mobile whilst abroad and particularly that (b) they used it for internet access would of course be quite wrong
As you correctly go onto say:
Indeed, it could have been as high as 3.5 million if all UK people that had travelled outside the UK had a vodafone mobile, took it with them, used it abroad whilst for internet access and weren't a business user
Of course, if the number could have been potentially even higher if even more people had done so! :cool:
Quite.
If it had gone completely unnoticed, it could have netted the company millions of pounds in extra revenue."
I would be very surprised if this was true.
VAT does not run through the revenue line. While they may have incorrectly charged it, they will almost certainly treated this like other VAT. E.g. Not put it through revenue, but simply paid it over to HMRC.
So the question is whether the VAT man lets them have it back. Most likely they will. But if not, this will then appear as an expense in their next set of results.
Suffice to say I am no longer with Vodafone, I prefer to stick with a company I can trust
loads of shops like Marks and Spencer were charging VAT a few years ago on jaffa cakes at the biscuit rate but they fought a case that it was a cake and i think they won against HMRC and got the refund but obviously didnt hand it to the customers. Dont know if they donated it elsewhere though. So VAT wrongly charged to the customer and if the company realises it then they dont hand it to the HMRC but can keep it for themselves probably.
I have a vauge memory that there are fairly strict rules against that sort of thing. The problem is, that if HMRC give the VAT back to Vodaphone and they keep it, the end-user could (if VAT registered) claim back VAT from HMRC that has already been refunded to Vodaphone.
So I don't think they're allowed to do that.
Unless I read the post wrong and the market share and contracts percentages were just 'added on' facts to the 330k statement.
To be more pedantic, the post itself says where 'But' is used incorrectly, the paragraph it starts with does not contradict the paragraph before as that already mentions VAT shouldn't have been charged.
I'm glad vodafone now fixed the issue. I hope their current automated refunds will work for those affected and those entitled get a refund without any hassle (:
Initially, HMRC refused to refund the VAT on the basis that the customers have overpaid the VAT, M&S would not be able to refund it to the customers and hence M&S would be unjustly enriched.
M&S subsequently (successfully) appealed on the basis that the market sets a price with no consideration of the VAT position. Customers are only interested in the total price, therefore the VAT that was paid over to HMRC represented lost profits for M&S.
However for Vodafone, they can trace who the money is due to and therefore would have to pay it over.