Sky price increase on the back of the raised VAT

beanutz

As we all know the VAT goes up on the 4th of January. Sky have informed us that they are going to round either up or down the increase as a result of the VAT change as of the 4th of January. Our example: we have a £24 package which they intend increasing the cost of by 50p per month which they are undercharging us by about 1p per month and we also have a £10 package which they are increasing by 25p per month which is an over charge of 4p per month. They also said it didn't matter how many packages you took they are only increasing the charge by 50p. It would appear that in our case the overcharge is 3p per month which although is not a lot of money if this were to happen across a lot of customers this is a considerable amount of money. And would suggest that £10 packages are subsidising £24.00 and above packages.

WhiteButterfly_2

2.5% of £24 is 60p so they've rounded it down to 50p and 2.5% of £10 is 25p which is the exact amount of the HD/multiroom increase.

HTH

HappyMJ

WhiteButterfly wrote: »

2.5% of £24 is 60p so they've rounded it down to 50p and 2.5% of £10 is 25p which is the exact amount of the HD/multiroom increase.

HTH

Not quite correct. A 2.5% VAT increase on £24 is 51p as the OP has stated. On £10 it's 21p. You need to take the 17.5% off first then add 20% to the figure. Or just multiply everything by 1.0212 as prices go up by 2.12%.

pen1

beanutz wrote: »

It would appear that in our case the overcharge is 3p per month which although is not a lot of money if this were to happen across a lot of customers this is a considerable amount of money. And would suggest that £10 packages are subsidising £24.00 and above packages.

Aside from simply rounding up or down to reflect the VAT change, I think there's an element of commercial decision-making in the price changes- the price of one basic pack is rounded up, but the costs of adding further packs are rounded down in many cases. The cost of adding the movies pack or ESPN remain unchanged.

In the past, Sky were even-handed when re-establishing the prices to a VAT rate of 17.5%, after reducing them to reflect the temporary rate of 15%.

I don't think that there is any clear evidence that points to Sky taking advantage of the VAT change; and the bottom line, of course, is that retailers are entitled to decide their own retail prices.

macman

With more than 10m subscribers, an extra 3p per month per subscriber would bring Sky approximately £3.6 million per year...

Inactive

Rest assured, Sky will not lose out on this VAT change.;)