AOL and VAT increase

caveat_emptor

Would advise checking your bill as AOL charged me more than the 2.5% increase.

caveat_emptor

Contacted AOL re the above. The answer I got was that VAT was calculated on my monthly charge before discount, in my case £5. This resulted in more than a 2.5% increase in my bill. Surely AOL have to pay VAT on its revenue not some notional amount. Am I wrong or am I wrong?

caveat_emptor

HMRC says
"Discounts on goods and services

If any of your goods or services are discounted, you charge VAT on the discounted price rather than the full price.
If you make an offer to a customer such as 'we will pay your VAT', VAT is actually payable to HM Revenue & Customs (HMRC) on the amount the customer would have paid on the discounted price, not the amount they have paid at the full price."

So it seems that AOL doesn't know the VAT rules.

ACDeag

caveat_emptor wrote: »

Would advise checking your bill as AOL charged me more than the 2.5% increase.

The actual increase should be 2.1% of the old VAT inclusive price. Something that cost £1 incl VAT at 17.5% before should now be £1.021

fiesta123

I have just discovered that although I was on a 18month contract with AOL broadband £14.99 ,they have have, less than 12months into contract, decided to hike it up to £19.99 / month .Plus with the VAT rise and a debit card charge it pushes it up to over £22!! I am still awaiting a reply from them but this surely is illegal given the contract was for 18months. I will be contacting trading standards if I do not get a satisfactory response and BBC watchdog after that!!

ACDeag

fiesta123 wrote: »

I have just discovered that although I was on a 18month contract with AOL broadband £14.99 ,they have have, less than 12months into contract, decided to hike it up to £19.99 / month .Plus with the VAT rise and a debit card charge it pushes it up to over £22!! I am still awaiting a reply from them but this surely is illegal given the contract was for 18months. I will be contacting trading standards if I do not get a satisfactory response and BBC watchdog after that!!

It will be perfectly legal, what it does mean is that you are entitled to exit the contract without penalty as the increase has a detrimental effect on you. They would have got away with a VAT and inflation increase but any more means you can exit. Nearly all contracts contain a provision allowing the supplier to increase charges, equally they contain a clause allowing you to exit if the increase is large.

fiesta123

Are you aware of the exact law that relates to leaving the contract then without penalty, so that I can quote it when I next contcat them.

ACDeag

fiesta123 wrote: »

Are you aware of the exact law that relates to leaving the contract then without penalty, so that I can quote it when I next contcat them.

No, you need to quote the clause number in your contract (Terms & Conditions) which allows you to exit. There will be one.

steveE2

fiesta123 wrote: »

Are you aware of the exact law that relates to leaving the contract then without penalty, so that I can quote it when I next contcat them.

Part of AOL's own T&C

1.4 Changes to the Services Agreements 11.4.1 It may be necessary for us to change one or more of the Services Agreements from time to time. We will provide you with notice at least 30 days in advance of such changes taking effect if these changes could reasonably be deemed to have a material impact on you or are to your disadvantage. If these changes could reasonably be deemed to have a material impact on you or are to your disadvantage and you don't agree to the changes proposed, your only remedy is to cancel your AOL Access subscription in accordance with clause 9 above. By continuing to subscribe to and/or use the AOL Access Service(s), you will have accepted the relevant changes.

However to cancel you have to do so within 30 days of being notified,as you say you have "just discovered" I assume you're past 30 days of the change in terms and therefore too late.

Sources:
http://help.aol.co.uk/help_uk/documentLink.do?cmd=displayKC&docType=kc&externalId=uk_860133389

http://help.aol.co.uk/help_uk/documentLink.do?cmd=displayKC&docType=kc&externalId=26302#ac9

http://help.aol.co.uk/help_uk/microsites/search.do?cmd=displayKC&docType=kc&externalId=28044#bb

http://help.aol.co.uk/help_uk/documentLink.do?cmd=displayKC&docType=kc&externalId=26301

fiesta123

Thanks ACDeag and Steve E2.
Looks like I am stuck with them until contract finishes, as over 30 days since they changed contract. Will see what they come up with but I feel very let down and mislead. :mad:

ACDeag

fiesta123 wrote: »

Thanks ACDeag and Steve E2.
Looks like I am stuck with them until contract finishes, as over 30 days since they changed contract. Will see what they come up with but I feel very let down and mislead. :mad:

When did they inform you?